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.

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Forced labor is often assumed to be a problem of distant supply chains. The case of Packers Sanitation Services Inc. (PSSI) dismantles that assumption entirely.

PSSI was a leading U.S. industrial cleaning contractor, servicing major meatpacking plants and backed by a top-tier private equity firm. Yet between 2022 and 2024, it became the center of one of the most significant child labor scandals in the U.S., one that had been quietly signaling its risks for years. SESAMm's controversy monitoring platform captured those early signals long before regulators intervened.

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The Scandal

In November 2022, the U.S. Department of Labor discovered that PSSI had employed minors as young as 13 in hazardous overnight roles across 13 locations in 8 states. A federal investigation confirmed 102 children had been illegally employed, many handling dangerous chemicals and machinery. Three years earlier, in 2019, PSSI had already been sued for wage violations. The signal was there. It went unheeded.

The Fallout

The consequences were swift. A $1.5 million DOL fine. Contract terminations by Cargill and JBS. A DHS trafficking investigation. A replaced CEO. By late 2024, PSSI had shut its corporate office entirely. Even the private equity owner, Blackstone, faced direct scrutiny from pension funds, a reminder that labor violations travel up the ownership chain.

The Lesson

Every warning sign in this case was publicly visible before the crisis broke out. Wage lawsuits, labor complaints, and media coverage are all available in the public domain. Real-time controversy monitoring can surface these signals early, giving companies and investors the chance to act before exposure becomes unavoidable.

Forced labor is not only a humanitarian crisis. It is a material risk that demands better data, earlier detection, and stronger accountability.

Download the full case study infographic to see the complete timeline of events and key takeaways

An analysis of over 250,000 infrastructure projects reveals that the sector most often filed under "clean energy" carries the heaviest environmental and social controversy footprint of any asset type assessed.

In the taxonomy of energy infrastructure, hydropower occupies a comfortable position. It is renewable, dispatchable, and long-lived, and it enters transition frameworks, green bond eligibility criteria, and net-zero roadmaps with minimal friction. Where coal is a legacy liability to be managed down and nuclear invites a specialized debate, hydropower is largely treated as settled. What these projects have actually done does not support that treatment.

Belo Monte, an 11,233 MW complex on the Xingu River in Pará, Brazil, is the sharpest test of the point, because it was built to answer this exact objection. Approved after decades of opposition to a far larger design, it was engineered as a run-of-river plant to minimize flooding, and its reservoirs cover 478 km², of which 274 km² was already river channel at high water, a 61% reduction compared with the 1980s proposal, according to the operator's own regulatory filing. The mitigation was designed from the start, and everything that follows happened regardless.

Biodiversity: the cost of a physical footprint

Environmental controversy across infrastructure concentrates on industrial accidents, water pollution, and biodiversity, and hydropower leads the third, outright, because dams require the permanent conversion of river systems and the land around them. Mexico's Federal Electricity Commission won environmental approval in September 2014 for the Las Cruces dam on the San Pedro Mezquital, upstream of Marismas Nacionales, a Ramsar-protected wetland, even though the project's own impact statement conceded that the damage to Indigenous ceremonial sites could not be mitigated. Along the Mekong River, river health and fish populations fell as dam construction spread through the basin. In Brazil, the Doce River carried a mass release of toxic material after an upstream failure. Elsewhere, the record includes violations of the Endangered Species Act and documented disruption to rainfall patterns.

At Belo Monte, the consequences have been measured rather than projected. The plant diverts water into a canal that bypasses a 130-kilometer stretch of the Xingu known as the Volta Grande, which has received less than 30% of its natural annual discharge since 2019, and some 86% of the stretch's seasonally flooded vegetation, 30,748 of 35,600 hectares, can no longer be inundated at all. The gap lies in the regulator's own file: IBAMA's technical staff called for 10,900 cubic meters per second in February, the historic peak month, compared with the 1,600 that the operating regime actually releases. Seven years of underwater video survey data published in Scientific Reports recorded total fish species richness falling from 62 to a post-operation average of 51, with the steepest losses near the dam and in the rocky rapids, which hold roughly 2.6 times as many species as sandy reaches. The zebra pleco, whose entire known range lies inside the dewatered stretch, now sits on Brazil's national list of threatened species as critically endangered.

None of this is an accident or a failure of operation. It is a structural consequence of the asset. A well-run dam still floods a valley, and a dam engineered specifically not to flood one still dewater the river below it.

When engineering fails: hydropower's physical risk profile

Coal mining leads infrastructure on industrial accidents, where the record is dominated by human tragedy and safety negligence: explosions, collapses, fires, and repeated, incremental failures. Hydropower ranks second, but its accidents take a different form, because in this sector, industrial failure means catastrophic engineering failure at scale. The record includes pipe ruptures causing severe land erosion, oil leaks, and dam collapses that killed and displaced people across whole regions, while PG&E's settlement over damages to the Middle Fork American River Hydroelectric Project and the litigation still running in Brazil after dam collapses give a sense of the exposure a single event can generate. For anyone underwriting these assets, the distinction is financial as much as physical: a coal mine's safety record is a rising cost curve, while a dam's structural integrity is a low-probability, near-unbounded loss.

At Belo Monte, that exposure has so far been financial. The project was budgeted at R$28.9 billion when Brazil's development bank approved a then-record R$22.5 billion loan in November 2012, and by late 2017, actual investment had reached R$38.6 billion, roughly 34% over. The operator owed R$28.3 billion to lenders and debenture holders at the end of 2024. Aliança Norte Energia Participações, the Vale and Cemig vehicle holding a stake in the project, discloses a possible loss of R$3.05 billion from a single construction-delay claim and describes the operator's liquidity as its principal point of attention and a source of investor alert. Neoenergia wrote off its own 10% holding by R$482 million in the fourth quarter of 2021.

The physical risk has been closer than the absence of a collapse suggests. In October 2019, the operator wrote to the national water regulator declaring an emergency, because reservoir levels had fallen far enough to expose an unprotected section of the Pimental dam's earthfill base to wind-driven wave erosion and, in the company's own words, structural damage. It cut outflow below the level agreed with the environmental regulator to protect the structure, and the letter surfaced only through investigative reporting.

Beyond the environment: displacement, water, and chronic corruption

Right to property

Hydropower ranks first among infrastructure sectors for property disputes, a direct function of the footprint a dam and reservoir require. The record shows land seizures, forced displacement, compensation that arrives short or not at all, communities never consulted before ground was broken, and blasting that cracked the foundations of nearby homes. Those affected are frequently the least equipped to hold an operator to account.

Fifteen years after Belo Monte broke ground there is still no audited count of who lost their homes. Estimates run from 20,000 to 40,000 depending on the definition used, against the operator's account of rehousing some 6,000 urban families. Landowners say expropriations are priced at unadjusted 2013 values while the project's own construction boom inflated the market, and as of 2025 none of the land required for the riverine resettlement program had been bought. A petition filed with the Inter-American Commission in 2011 still has no ruling.

Community health and safety

Hydropower sits alongside coal and nuclear as a leading source of community health disputes, but it arrives by a different route. Coal delivers PM2.5, nuclear delivers radioactive anxiety, and hydropower delivers water mismanagement: overconsumption that strips farmers of a livelihood, contaminated water reaching local crops. The grievance is agricultural rather than industrial, which widens the affected population considerably.

On the Volta Grande, catch per fisher fell from 11.1 kilograms a day between 2001 and 2008 to 4.53 kilograms between 2020 and 2023. A randomized household survey found 38.5% of residents in Belo Monte's resettlement neighborhoods living with moderate or severe food insecurity, against 28.3% across the surrounding city. In June 2026, federal prosecutors sought as interim relief for 635 families along the reduced-flow stretch the emergency delivery of three and a half to five liters of drinking water per person per day.

Corruption and bribery

Corruption and bribery accounts for close to 30% of governance controversy across infrastructure. What separates hydropower is the pattern. In airports, nuclear, and coal, corruption surfaces as discrete scandals: a probe opens, executives are charged, attention fades. In hydropower it keeps returning, tied repeatedly to falsified records and payments to local officials to secure land and water rights. Isolated scandals point to isolated actors. A pattern that recurs points to how these projects get permitted.

Brazilian prosecutors alleged that Belo Monte's construction contracts carried bribes worth 1% of their value, and three contractors admitted cartel conduct and kickbacks under leniency agreements that carried immunity. Everything after that was procedural closure rather than a finding of liability: the principal defendants were acquitted and the acquittal upheld on appeal in 2024, the competition authority archived its bid-rigging case in 2025, and no individual has been convicted in connection with the project. An investor screening for enforcement outcomes would have found a closed file. The costs landed elsewhere, in permitting delay, financing conditions, and a minority stake that has been for sale since 2022 without a buyer.

Hydropower's risk concentration: what this means

Hydropower's classification as clean energy is accurate on the metric it was designed to measure, because generation is low-carbon. But carbon intensity is one dimension of sustainability, and it is not the dimension that produces operational friction, legal exposure, or the loss of a social license.

What drew sustained opposition to these projects was water rights, displaced communities, cracked foundations, converted wetlands, and permits secured through local payments. None of it appears in a carbon accounting framework.

For investors, insurers, and lenders seeking transition-aligned infrastructure exposure, that is a material blind spot: an asset class that screens well on the primary criterion while carrying the heaviest social burden in the dataset, and carrying it on behalf of people who have no employment relationship with it. Belo Monte was engineered to avoid precisely that outcome and produced it regardless, which suggests the exposure is not a function of how a dam is built but of what a dam is.

The label is not wrong. It is simply measuring something other than risk.

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