Stand.earth on Bloomberg New Energy Finance Latest Energy Ratio Report

GLOBAL – Today, Bloomberg New Energy Finance (BNEF) released its updated report, Energy Supply Banking Ratios, revealing that major fossil fuel financing banks – including Citi and Royal Bank of Canada (RBC) – continue to vastly underfinance renewable energy and climate solutions. This comes as US and Canadian banks quit the Net Zero Banking Alliance around Trump’s inauguration, and following Earth’s hottest-ever year.

Energy ratios are becoming an increasingly crucial tool for investors to evaluate how banks are helping or hindering the energy transition. According to the International Energy Agency (IEA), the ratio of financing clean-to-dirty energy supply must be 6:1 by 2030 to support an energy transition that hopes to keep temperature increase under 1.5 degrees.

Notably, BloombergNEF reveals that the Royal Bank of Canada’s was the lowest of the world’s biggest lenders, at 0.47.

On this latest report, Hannah Saggau, Stand.earth Senior Climate Finance Strategist, issued the following statement:

“This well-researched report provides a much-needed standardized methodology for investors to transparently measure and compare banks’ financing for renewable energy relative to fossil fuels. Unfortunately, global banks like RBC and Citi remain dangerously out of line with a just transition while backsliding on global commitments. As our communities experience intensifying fires, floods, and storms, any self-reporting diverging from this standardized model risks confusing investors and perpetuating greenwashing.”

According to BNEF, top fossil fuel financing banks reveal the following ratios:

The BNEF report uses a standardized methodology applied across 1000 banks it reviews, allowing a like-for-like comparison for investors. Self-reporting by banks using individualized, custom methodologies, like those used by JPMC, contain different and often conflicting data, making it ineffectual for investors who seek to compare banks’ progress. For example, JPMorgan Chase (JPMC) released its own self-reported ratio as 1.29:1 low- to high-carbon energy financing, using a flawed methodology. 

This also comes as an 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,” with 1-out-of-5 sustainability-linked dollars since 2018 going to major polluters.

In early 2024, shareholder resolutions by New York City Comptroller Brad Lander, supported by Stand.earth, advanced at the largest North American banks. Prior to planned votes at Citi, RBC, and JPMC, the banks agreed to the terms of the resolutions, resulting in withdrawals of the proposals and commitments to transparently report their energy ratio financing. Investor support for the resolutions that went to a shareholder vote at Bank of America, Goldman Sachs and Morgan Stanley, ranged between 23% and 29%. These resolutions have been submitted at these banks, as well as other Canadian banks, for consideration at 2025 meetings. 

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