Oil rig in Midland Texas. Photo: Creative Commons (CC0).

Whereas global carbon dioxide emissions from burning coal have levelled off since 2010, emissions from oil and gas have continued to rise. Despite having a lower carbon dioxide intensity than coal, global carbon dioxide emissions from burning oil are now almost as high as those from coal. Gas has just over half the carbon dioxide intensity of coal and is often marketed as a 'transition fuel'. Whilst it currently causes about half the global carbon dioxide emissions of coal, the emissions from gas are increasing faster than both coal and oil. Furthermore, gas consists predominantly of the powerful greenhouse gas, methane, which evidence shows often leaks during processing, storage or distribution of gas. Opposition and campaigns against fossil fuels have historically been focused primarily on coal, but over recent years this focus has shifted to include oil and gas as well, particularly to the most polluting sub sectors such as tar sands and fracked oil and gas. 

The policies adopted by banks over the past few decades regarding fossil fuels mirrors the focus of the opposition to different sectors. Most restrictions have been placed on the financing of coal, with far fewer restrictions being placed on financing oil and gas, excluding the most environmentally destructive forms of oil and gas such as tar sands, Arctic oil and gas, and fracked oil and gas. 

Financing of oil and gas

In order to meet the 1.5 degrees temperature goal set in the Paris Climate Agreement, global carbon dioxide emissions must be more than halved from 2010 levels by 2030 and reach ‘net zero’ by 2050. This gives us a 50% chance of staying below a 1.5 degrees temperature increase by 2100. By 2030, emissions from burning oil and gas have to decrease by at least 44% and 39%, respectively. Unfortunately, current policies and pledges will lead to a 16% and 5% increase in oil and gas emissions, respectively, over the next decade. 

So current policies and pledges are not even close to being aligned with the goals set in the Paris Climate Agreement, which means that at the very least, no expansion of new fossil fuel reserves and infrastructure can be planned. Banks must therefore end support for all new oil and gas activities and implement a full phase-out for financing oil and gas projects and companies in line with the Paris Climate Agreement.

Since signing of the Paris Climate Agreement, the 60 largest banks in the world have financed key oil and gas sectors with more than USD 1 trillion. The world's four biggest financiers of these key oil and gas sectors are US banks JP Morgan Chase, Citi, Bank of America and Wells Fargo.

See here for banks' exposure to oil and gas sectors in 2016-2021.

Oil and Gas Policy Tracker

Reclaim Finance tracks the oil and gas policies of financial institutions, including banks, in the Oil and Gas Policy Tool. The below shows the assessments for commercial banks. The table can be filtered by Country and for NZBA membership (more on that see here). For more information about the tool and methodology, see www.oilgaspolicytracker.org

Feedback welcome

Our policy assessments are always a work in progress and we very much welcome any feedback, especially from banks included in them. You can of course also contact us for more information on specific scores and the latest policy changes. Please get in touch at climate@banktrack.org.

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