A groundbreaking report reveals that global banks are funnelling 20 times more financing into the fossil fuel and industrial agriculture industries in the Global South than governments are receiving for climate solutions.

The new report “How the Finance Flows: the banks fuelling the climate crisis” reveals that the world’s banks have put $3.2 trillion towards the expansion of fossil fuels since the Paris Agreement in 2016, with $370 billion being funnelled into the second major cause of climate change, industrial agriculture operating in the Global South. Top banks funding the climate crisis include HSBC, Citigroup and JP Morgan Chase and in Australia, ANZ is leading the pack. 

New polling conducted by ActionAid showed that three in five Australians care if their bank invests in fossil fuel and industrial agriculture companies that contribute to climate change and threaten the future of those on the frontlines of the climate crisis. Over half of Australians want banks to stop funding fossil fuel companies (56 per cent), and almost half (46 per cent) want banks to stop funding harmful industrial agriculture. 

Teresa Anderson, Global Lead on Climate Justice at ActionAid International and author of the report, said: “Global banks often make public declarations that they are addressing climate change, but the scale of their continued financing of fossil fuels and industrial agriculture is simply staggering.”  

She maintains that it is communities in Africa, Asia and Latin America who are suffering the impacts of decisions made in distant banking boardrooms. “By financing fossil fuel and industrial agriculture in the Global South, banks are condemning communities to the cruel combination of landlessness, deforestation, water pollution and climate change. With this report, banks can no longer pretend that the issue is out of sight, out of mind.”

Ms Anderson says, “Banks need to own up to the harm that they are unleashing on the communities and the planet, and urgently stop financing the destruction wreaked by fossil fuels and industrial agriculture.” 

Country Manager of ActionAid Vanuatu, Flora Vano believes that the climate crisis is an existential threat to the lives and livelihoods of women in her community. “We are facing climate disaster after climate disaster that is leaving us with little time to recover. There can be no more investment in new fossil fuels if my country is to have a future. To stay below 1.5 degrees, we need a phase out of fossil fuels not a phase down.”

Women in Vanuatu are finding solutions and leading efforts to build their community's resilience to climate change, but without urgent global action to stop the financing of climate wrecking industries their efforts to protect our communities will not be enough. “We cannot hold back the tide on climate destruction on our own,” Ms Vano says: ActionAid's report sets out the alternatives to these harmful practices.

Executive Director of ActionAid Australia, Michelle Higelin says, “Scaling up investing in women's leadership in solutions like renewable energy and agroecology is essential and this must be supported by public financing. There is a lot more the Australian Government could be doing to finance the climate solution.”

The report calls for banks to immediately stop project and corporate financing for all new deforestation, coal and fossil fuel expansion activities, and rapidly phase out financing of all other fossil fuel and harmful industrial agriculture activities. 

Banks must also strengthen policies against human rights abuses and deforestation to protect the rights of communities most impacted by climate change. 

Governments, like Australia’s, should regulate the banking and finance sectors to stop the financing of fossil fuel expansion, and scale up support and planning for just transitions to real solutions such as renewable energy and agroecology.