New Exposé Uncovers Billions in Bogus “Sustainability-Linked” Financing

January 16, 2025
A new exposé from The Examination, The Associated Press, Toronto Star, and Mississippi Today reveals how banks are giving billions to major polluters, and labeling it as “sustainable.”

2024 was an unprecedented year for corporate greenwashing. As 2025 kicks-off amidst  fires, smoke, storms and floods, we’re already seeing big banks and asset managers backsliding on global climate commitments, revealing their true ways of climate delay and deceit.

A new exposé from The Examination, The Associated Press, Toronto Star, and Mississippi Today reveals how banks are giving billions to major polluters, and labeling it as “sustainable.” 

This deep investigative reporting revealed that, since 2018, of the $1.5 trillion of “green” loans and bonds issued, $285+ billion has gone to major polluters like Enbridge, Shell, and Drax. That’s 1 out of 5 sustainability-linked dollars, and enough to cover costs of major US climate disasters in 2024 – 1.5 times over. 

As Richard Brooks, Stand.earth’s Climate Finance Director points out, these sustainability-linked loans and bonds “do not lead to measurable change… and they’re really meant to greenwash your finances mostly for expansion activities.”

Banks’ billions of sustainability-linked bogus

The findings are damning; banks like Royal Bank of Canada (RBC), Bank of America, Barclays and Citibank tag these as “Sustainability-Linked Loans” or “Sustainability-Linked Bonds” (aka SLLs or SLBs), doling them out to clients at a major discount, but requiring little to no oversight, transparency, or accountability to ensure these billions actually go to climate solutions. 

According to The Examination and Associated Press investigation, spearheaded by reporter Sasha Chavkin, “In several cases, the companies’ own documents showed that their overall emissions increased substantially even as they received SLLs linked to decarbonization.”

RBC, Citibank share “green veneer” with Enbridge

As uncovered by Marco Chown Oved and Robert Cribb for the Toronto Star, this deception is clear among Canadian banks as the terms of these deals are kept “mostly secret,” leaving the public and investors in the dark on how to measure “sustainability,” while they publicly tout broad climate goals.

Take Enbridge, one of the largest pipeline companies in North America. Since 2021, Enbridge has emerged with “eco-funding” to the tune of $7.3 billion. That’s enough to cover the costs of Canada’s two biggest climate disasters in 2024 – 4 times over. 

Meanwhile, Enbridge plows polluting pipelines through communities without consent. The pipeline company’s emissions have actually gone up since its first sustainability-linked loan in 2021, which was funded by a group of more than 20 banks including RBC, Barclays, JPMorgan and Citibank.

“There are choices being made here to continue to do business as usual and add a green veneer to it,” reminds Brooks.

In 2024, RBC CEO Dave McKay and the country’s top bankers were forced to testify in Parliament on the role of Canadian banks in financing, or holding back, an inevitable just transition off fossil fuels. RBC is currently under investigation by Canada’s Competition Bureau for allegedly misleading advertising. 

Drax: forest and climate criminal

In 2024, international energy giant Drax got its biggest SLL to date. As reported by Alex Rozier for Mississippi Today, “Drax, the British owner of wood pellet plants in Mississippi and Louisiana that has paid millions in fines and settlements for violating state pollution laws in recent years, has received at least $762 million in ‘green’ loans during that same period.”

As published in Associated Press, “John Sterman, a professor at the Massachusetts Institute of Technology, said Drax’s sustainability-linked loans incentivize activities that end up being more damaging to the environment.”

Burning forest biomass to generate energy at utility scale, often in the form of wood pellets, has devastating consequences for global emissions reduction targets. As countries seek alternatives to coal, many like the United Kingdom and Japan are turning to burning imported biomass to keep the lights on. But burning biomass can emit at least as much CO2 as coal at the smokestack. So how can Drax and the banks and countries it does business with claim that biomass is renewable energy?

As Sasha Chavkin writes in The Examination: “They don’t count emissions from burning wood. [They use a] carbon accounting escape clause – endorsed by the United Nations Framework Convention on Climate Change.”

Forests around the world face the growing threat of biomass sourcing, which can entrench and expand industrial logging to keep up with the demand. Multiple investigations have revealed that Drax sources biomass from old growth forests in Canada. In the US southeast, pellet plants are often located on the doorsteps of lower-income majority Black communities where they create large amounts of air pollution harming the health of those who live nearby. Burning biomass is a dangerous distraction from real green energy solutions, and the big banks are complicit in advancing it. 

Accountability and the fight ahead

Let’s be clear: despite greenwashing efforts, big banks and fossil fuel companies are lying to all of us while poisoning water, air, and land. Meanwhile their CEOs rake in multi-million-salaries, while our communities recover and rebuild from unnatural disasters. The time for accountability is now.

In 2025, our job is to protect our communities and put that choice front and center. Instead of financing climate criminals fossil fuels and biomass, banks must stop the deception and finance climate-safe solutions – or risk lawsuits and major losses. Fossil fuel companies, meanwhile, must be held accountable for climate damages and deception.