Despite net zero commitments, critics claim that big banks are pouring billions into new oil and gas extraction.
Despite being part of a green banking group, HSBC, Barclays, and Deutsche Bank continue to support new oil and gas, according to ShareAction.
Investors should put pressure on banks to require green plans from fossil fuel companies before funding them, according to the report.
HSBC and Barclays both said that they were committed to meeting environmental targets.
“Net zero” refers to not adding to the existing greenhouse gas levels in the atmosphere by reducing and balancing emissions.
If the Earth wants to prevent harmful environmental repercussions, such as more severe weather, average global warming must be kept below 1.5 degrees Celsius.
Experts say we need to go to net zero by 2050 to achieve this.
The International Energy Agency has said that no new oil and natural gas resources should be developed as part of the net zero goal.
Despite being members of the UN-led Net Zero Banking Alliance, large banks are continuing to subsidize oil and gas growth with billions of dollars, according to ShareAction.
According to the advocacy organization, HSBC invested $8.7 billion (£6.4 billion) in new oil and gas in 2021, while Barclays invested $4.5 billion and Deutsche Bank lent $5.7 billion.
Exxon Mobil, Shell, BP, and Saudi Aramco were among the companies that received financing.
According to estimates from consultant Profundo, financing dropped dramatically between 2020 and 2021, with HSBC alone pumping more than $18 billion into new oil and gas.
According to ShareAction, this is due to banks focusing on pandemic-related loans to keep fossil fuel companies viable throughout the epidemic, and financing will return to pre-pandemic levels in 2021.
Meanwhile, the International Energy Agency and the UN’s Intergovernmental Panel on Climate Change “believe that major investment in oil and gas is still needed under Paris-aligned scenarios,” according to Exxon Mobil.
Even in the IEA’s net-zero scenario, “an extra investment of roughly $11 trillion in combined oil and natural gas production through 2050 would be necessary to supply the world’s energy demand,” it added.
“We have put out a plan to achieve our net zero aim,” BP added.
“Resilient hydrocarbons are an important component of our plan, but we do not want to increase oil and gas output; in fact, we estimate production to decline by 40% between 2019 and 2030.”
“We intend to keep investment in oil and gas unchanged over the next decade as output declines,” BP said, “while increasing our expenditure in transition growth industries – such as electric vehicle charging, convenience, renewables, hydrogen, and bioenergy – to about 50% of total spending by 2030.”
Shell and Saudi Aramco were contacted for comment, but both declined.