Big banks have traditionally been supporters of the fossil fuel industry and even after the signing of the Paris Agreement in 2015, large financial institutions continued to pour $3.6 trillion into fossil fuel projects. It seems like 2021 might finally be the year that large banks get on board with a greener future as green bonds and loans from the global banking sector have exceeded fossil fuel financing for the first time.
A Bloomberg study concludes that big banks have contributed $203 billion in bonds and loans to renewable projects and other climate-friendly ventures this year and only $189 billion to businesses focused on hydrocarbons.
The biggest financial actor in green energy funding is JPMorgan Chase, followed by Citigroup, Bank of America, and Wells Fargo. Bloomberg notes that the world will need an estimated $3 trillion in annual renewables investments to limit warming to 2 degrees Celsius by 2050, meaning investments will have to increase fivefold in the next 30 years.
Although we have not hit our ultimate goals in terms of renewables funding and fossil fuel divestment, this data is a promising indicator that even the staunchest supporters of fossil fuel are beginning to accept the transition to green energy.