Mark Carney’s net zero group disputes data showing only 7 per cent of banks’ energy financing goes to renewables

Only seven per cent of global banks’ energy financing between 2016 and 2022 went towards renewable energy projects, according to new data, although Mark Carney’s net zero financial coalition has disputed the claim.

A report by a group of campaign groups, including BankTrack and Rainforest Action Network, indicates “major failings” by financial institutions to help meet global commitments on net zero emissions by 2050.

Of the $2.5 trillion in bank loans and bond underwriting for energy activities made out since 2016, only $178bn was directed towards renewable energy projects, the report said citing data from sustainability research firm Profundo.

The share of financing for renewables reached a high of ten per cent in 2021. Last year the figure was nine per cent.

Regarding individual banks, Citi and JP Morgan both put $181bn into energy companies between 2016 and 2022, but only two per cent went to renewable energy firms.

In the UK, data shows only two per cent of Barclays’ financing of energy companies went towards renewable energy firms over the six year period. For HSBC, only five per cent of energy financing went towards green energy firms.

However, the figures were called into question by the Glasgow Financial Alliance for Net Zero, or GFANZ, led by former governor of the Bank of England Mark Carney.

“The report does not provide a comprehensive view of clean energy investment,” a spokesperson for the group told City A.M.

“The report excludes 70 per cent of power generation companies, the bulk of which accounts for most of the world’s wind and solar power,” they said.

“Analysis by the IEA suggests that between 2021 and 2022 around 48 per cent of total energy investment went to low carbon energy supply. That would be impossible if GFANZ members weren’t financing the transition,” the spokesperson said.

The campaign groups’ report did not consider biomass, nuclear, and blue hydrogen as renewable energies. Investment in carbon capture and storage was also not included. The IEA report, however, had a much broader definition for what it considered to be low-carbon energy investments.

A Barclays spokesperson said: “Barclays was one of the first banks to set an ambition to become net zero by 2050. We have set 2030 targets to reduce our financed emissions in four of the highest emitting sectors in our financing portfolio, with additional 2025 targets for the two highest-emitting sectors – energy and power.”

JP Morgan declined to comment. Citi and HSBC were contacted for comment.