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Just five banks in the US and Canada provided nearly US$200bn in financing for fossil fuel activities last year, prompting campaigners to call for tougher regulation against lenders whose energy transition plans “cannot be trusted”. 

Royal Bank of Canada (RBC) became the single largest funder of fossil fuels in 2022, according to this year’s edition of Banking on Climate Chaos, a report produced by a group of climate-focused NGOs.  

The Toronto-headquartered lender provided over US$42.1bn to the sector, up from US$40.4bn the previous year, measured by loans and underwriting services such as bond and share issuance. 

The next four largest backers of fossil fuels are US-based banks JP Morgan Chase, Wells Fargo, Bank of America and Citi, each providing between US$$33bn and US$39bn – though Bank of America is the only lender to have increased that figure since 2021.  

All five have pledged to reach net zero emissions by 2050. But Oil Change International, a co-author of the report, says the findings show US banks “dominate fossil fuel financing”, accounting for 28% of lending to the sector globally, while Canadian banks risk becoming “the banks of last resort” for non-renewable energy. 

LNG continues to prove a flashpoint for environmental campaigners following Russia’s invasion of Ukraine, with banks and energy companies citing the need to maintain energy security and affordability.  

The report finds overall financing for liquefied natural gas (LNG) almost doubled compared to 2021 levels, reaching US$21.3bn. 

Prior to the war, the European Union sourced around half of its natural gas from Russia, but that figure dropped to 10% by the end of last year. 

At the same time, European LNG imports soared by 63% to their highest level on record, International Energy Agency data shows. Around two-thirds were supplied by the US, though Angola, Egypt, Norway, Qatar and Trinidad and Tobago also increased exports. 

LNG transactions have also attracted state support, including a US$3bn Deutsche Bank loan to Trafigura backed by Germany’s export credit agency. 

But climate-focused NGOs say that to meet the 2015 Paris Agreement goal of keeping global warming below 1.5°C compared to pre-industrial levels, there must be an immediate halt to fossil fuel expansion, including LNG terminals, as well as oil and gas fields, pipelines and coal-fired power plants. 

“The top 30 companies expanding LNG used the crisis to secure nearly 50% more financing in 2022 compared to 2021 from the banks in the report – even as most energy experts agree that the LNG expansion plans in Europe are unnecessary, and new projects would contribute to a supply glut and long-term dependence on this fossil fuel,” Oil Change International says in a statement. 

In response to the report’s findings, campaigners are calling for government intervention to halt bank support for polluting fuels. 

“The big oil and gas companies that have done the most to fuel the climate crisis cannot be trusted to phase out their own extractive, polluting business model,” says David Tong, global industry campaign manager at Oil Change International. 

Richard Brooks, climate finance director at Stand.Earth, says the data is “a clear signal for the need for increased regulation and aggressive pressure from shareholders and customers”. 

Keith Stewart, senior energy strategist at Greenpeace Canada, adds: “Our federal banking regulators must similarly require banks to phase out fossil fuel finance while ramping up support for clean energy.” 

Bank of America and Wells Fargo declined to comment when contacted by GTR. Representatives for RBCand Citi have not responded as of press time. 

A spokesperson for JP Morgan tells GTR: “We provide financing across the energy sector: supporting energy security, helping clients accelerate their low carbon transition and increasing clean energy financing with a target of $1 trillion for green initiatives by 2030.”