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Investments in fossil fuels

fossil fuels coal pile
Climate change is raising global awareness that deals arranged by banks at nearly $250 billion in
prompts government officials to take countless 2021.
initiatives to combat it. Globally, the goal is to ac- The largest change in fossil fuel financing is re-
hieve a fully sustainable energy landscape in ported by the Postal Savings Bank of China from
2050. Overall, 99.7% of CO2 emissions are ac- 2016 to 2020. The increase from $168 million in
counted for by the countries. In the long run, the 2016 to $2.2 billion in 2020, was over 1200%. The-
goal is to switch to 100% renewable wind, water, se investments show a real contradiction. Even
and solar power by 2050, with at least 80% by though the finance industry has committed to
2030. Global warming would be mitigated and the fighting climate change, the biggest banks in the
energy sector would be stabilized if the planet we- world are funding the fossil fuel industry subs-
re powered completely by sustainable energy. Ma- tantially.
ny nations around the world have enacted anti-oil The second-largest change between 2016 and
policies that emphasize the need to transition to 2020 in fossil fuel change finance was seen by
clean energy. However, this dramatic transfor- China Minsheng Bank, as its financing reached $
mation cannot be achieved without the full sup- 10.8 billion, a 550 % increase from $1.7 billion.
port of global stakeholders (policymakers, busi- During the recent World Petroleum Congress in
nesses, and other relevant organizations) In that Houston (Texas), OPEC Secretary-General
context, environmentalists and climate change Mohammad Barkindo stated: “A halt in
activists advocate Wall Street and banks around investment in oil and gas is misguided. Almost
the world should shun fossil fuels. Efforts are $12 trillion in spending is made between now and
being made to limit global emissions. 2045 to ensure adequate crude and gas supplies,
JP Morgan, Wells Fargo, Citi, RBC, and Mitsubishi without which the world will see long-term scars
UFS are the biggest lenders to fossil-fuel projects. on energy security, affecting not only producers
So far this year, JP Morgan has financed the most but also consumers.” They propose to raise
loans and bonds combined. For oil and gas com- spending by the end of this decade to $523 billion
panies, the bank has underwritten bond deals to- a year. An uncontrollable increase in energy
taling $2.5 billion. Another big lender is Wells prices and economic unrest would be prevented
Fargo, which has provided mostly loans to the with this step. Divestment from coal or curtaining
companies in that sector. of lending to coal companies is not the solution
Climate change is raising global awareness that to mitigate climate change, according to financial
Even with societal pressure, banks worldwide institutions. They believe oil and gas will still be
continue to lend money and issue bonds from oil, needed in the near future. Governments should
gas, and coal companies, with fossil fuel bond stop discouraging investments in fossil fuels.

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