on latest “Bloomberg Financing the Transition” report

December 14, 2023
“Big fossil banks like RBC and Citi make zero progress on driving climate solutions”

On the heels of COP28, BloombergBNEF released its latest edition of Financing the Transition: Energy Supply Investment and Bank-Facilitated Financing Ratios 2022. The report analyzes major banks’ financing of dirty fossil fuel derived energy versus financing of low carbon energy solutions. The report concludes that banks have made no progress in resolving drastic underfinancing of renewables.

Notably the records of banks like Royal Bank of Canada and Citi have worsened compared to 2021 data. Based on energy models from the International Energy Agency and others, to help keep temperature under 1.5 degrees, the ratio of financing of low carbon energy to dirty energy needs to be 4:1 by 2030 and increasing after that.

On this report, Richard Brooks, Climate Finance Director, issued the following statement:

“After all the extreme weather we have experienced in the last 5 years and the attention on banks’ roles in financing fossil fuel companies destroying our climate, it’s absurd that all North American banks have done virtually nothing to improve financing of low-carbon energy solutions. Big fossil banks like RBC and Citi make zero progress on driving climate solutions. No bank is doing its fair share of the work required to transition our global energy systems. In fact, they continue to make the problem worse.”

By volume of energy financing, having done $42.7 billion worth of energy deals in 2022 according to Bloomberg New Energy Finance, RBC remains the largest energy financing bank in Canada and number eight in the world. Analyzing 2022 data, RBC remains the lowest of the top 10 banks engaged in energy financing for the ratio financing of low carbon energy to dirty energy by volume. RBC’s financing of low carbon energy decreased in 2022 compared to 2021 by nearly half, dropping from $2.7 billion to a measly $1.5 billion. RBC’s 2022 ratio is 0:4 meaning for every dollar put into fossil fuel energy financing, only 40 cents are going into low carbon energy including renewables. This is despite repeated calls, including just this week at COP28, for the need to drastically increase financing of renewables. 

Citibank actually did worse in 2022 compared to 2021, with the ratio of their clean to dirty energy financing dropping from 0:7 to 0:6 and total low carbon energy financing dropping from $33 billion to $20 billion. This is despite rhetoric that the bank is attempting to be a climate leader and a $1 trillion so-called “sustainable finance” by 2030 goal. 

BNEF concluded that some 45 banks engaged in at least $10 billion of energy supply financing in 2022. This group financed and facilitated approximately $1.2 trillion of energy supply financing in 2022. In total, 1100 banks included in the study, underwrote a total of $1.7 trillion of energy supply transaction activity in 2022, with $0.7 trillion being for low-carbon energy and $1 trillion for fossil fuels for an average ratio of 0.73.

Overall data for Canadian Banks which rank the lowest amongst the top 100 banks globally:

Bank Volume of Energy Financing Rank in global energy financing Ratio of clean to dirty energy financing Rank by ratio (out of the 100 top banks)
RBC $42.7 B 8 0.37 97
Scotiabank $35.9 B 13 0.32 Off the top 100 chart
TD $30.2 B 15 0.35 100
CIBC $18.9 B 28 0.45 90
BMO $17.9B 27 0.41 88
National Bank $14.9B 37 1.1 52