U.S. banks have dramatically increased fossil fuel financing in a notable contradiction with the narrative established after COP26. According to the 2025 Banking on Climate Chaos report, compiled by the Rainforest Action Network and its partners, global banks significantly scaled up their support for the fossil fuel industry in 2024, with a staggering $162 billion increase, pushing total financing to $869 billion.
U.S. institutions are at the forefront of this backslide. JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo accounted for one-third of global fossil fuel financing, approximately $289 billion. JPMorgan alone provided $53.5 billion, a 35% rise in funding that placed it at the top of the global list. Bank of America and Citi each contributed over $44 billion, while Barclays led among European banks, increasing its lending by 55% ($35.4 billion).
Why the Sudden Surge?
This resurgence coincides with the political shift in the U.S. following the Trump administration’s departure from the Paris Agreement and weakened climate policies. In parallel, several major banks have exited the Net-Zero Banking Alliance, prompting environmental groups to accuse them of “walking away from climate commitments.”
What This Means for Climate Risk
The spike in fossil fuel financing carries profound implications. First, it increases banks’ exposure to climate liability risk. A Financial Times analysis cites growing concerns that banks may face litigation due to their financing practices in relation to climate change. Second, funneling money back into carbon-intensive sectors undermines global efforts to limit warming to 1.5 °C; long-term goals rest on systemic transitions away from fossil fuels.
Public Relations vs. Funding Reality
Banks have defended their actions by emphasizing fossil fuels and clean energy investments. JPMorgan, for instance, claims it invested $1.29 in green energy for every dollar in fossil fuel financing. Nevertheless, critics argue that green financing claims ring hollow when fossil fuel funding is simultaneously ramping up.
Rebuilding Credibility in Sustainable Finance
The disconnect between words and actions is a challenge for the financial sector. With growing scrutiny on climate claims, stakeholders demand greater transparency and accountability. Greenwashing has evolved from a reputational issue to a regulatory one, impacting trust and market access. Banks that emphasize climate commitments while increasing fossil fuel investments risk losing credibility. To maintain stakeholder confidence, a genuine transition to clean energy financing is crucial. Trust now hinges on consistent actions rather than just marketing promises, allowing us to build a sustainable future together.
SESAMm’s AI Technology Reveals ESG Insights
Discover unparalleled insights into ESG controversies, risks, and opportunities across industries. Learn more about how SESAMm can help you analyze millions of private and public companies using AI-powered text analysis tools.