The banks fuelling the climate crisis in the Global South

Find out more about ActionAid’s groundbreaking new research into the financial flows fuelling industrial agriculture and fossil fuels – the two industries that are the largest contributors to climate change. These finance flows enable these harmful industries to expand and thrive. Meanwhile, the solutions needed to address the climate crisis remain woefully underfunded.

I’ve seen first hand the devastation extreme weather can inflict on the lives of people who did very little to cause it, and this injustice is what spurs me on as a climate activist. What angers me the most is the lack of action that world leaders and huge polluters are taking to halt this crisis.

Money continues to be pumped into harmful activities that threaten the existence of our planet and its people. This report reveals the trillions in harmful finance flowing to the Global South, fuelling the climate crisis and directly harming vulnerable communities. Above all, and crucially, it celebrates the climate heroines and heroes, the farmers and communities leading the way with agroecology and rooted resistance.

Vanessa Nakate, Activist, writes in the foreword of our new report

This flagship report of our campaign, Fund our Future, looks at the role played by major international banks in financing fossil fuels and industrial agriculture in the Global South. It also examines the current role of public financing in supporting fossil fuels and industrial agriculture, and how public finance could instead support a transition towards a more sustainable future based on renewable energy and agroecology.

  • In Part 1, we set out the context of the climate crisis to explain why system change is needed. We examine the climate impacts of fossil fuels and industrial agriculture, as well as their broader effects on the environment, gender equity and social justice.
  • Part 2 looks at financial flows to industrial agriculture and fossil fuels that are harming the planet, and evidence that finance flows for fossil fuels are still far greater than those for climate adaptation and mitigation. Private financial flows can take various forms – including bond and shareholdings by asset managers, pension funds and insurance companies. For the purposes of this report, however, we focus on bank financing, in the form of loans and underwriting. We find that bank financing for the fossil fuel industry in the 134 countries of the Global South reached an estimated US$3.2 trillion dollars since 2016 when the Paris Agreement on Climate Change was adopted. Bank financing to the largest industrial agriculture companies operating in the Global South amounted to US$370 billion over the same period.
  • Part 3 of the report examines how public finds are currently harming the public interest. We survey the financing offered to industrial agriculture and fossil fuels by state-owned banks and enterprises, development finance, public investment funds, and public subsidies.
  • Real and sustainable solutions to address global energy and food requirements already exist, which we examine in Part 4.
  • In the final section of this report, Part 5, we set out recommendations for banks and governments to support a just transition from funding the world’s destruction, to financing its hope for survival.

Read the report, share with your networks and join ActionAid on our journey to end the funding of our world’s destruction, and instead, #FundOurFuture.

Read full report on Action Aid’s website

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Case Study: Citibank Funds Oil Expansion in Amazonia

In 2017, Citibank was the sole underwriter on $615.3 million USD in bonds issued by Petroamazonas (now PetroEcuador) to repay debts to vendors and service suppliers especially Schlumberger – the oil company owed over $850 million USD for oil drilling in the Shushufindi and Auca blocks in the Ecuadorian Amazon between 2015 and 2017. Citibank’s involvement in the deal also lent much-needed credibility to the state-run oil company, which went on to start a massive drilling campaign with Schlumberger in the ITT Block in Yasuni National Park.

In 2020 Citibank, along with Itaú Unibanco, provided GeoPark with a bridge loan to secure GeoPark’s acquisition of Amerisur — a small Colombian oil producer with a history of polluting Indigenous territory in the Amazon. Citibank and Itaú Unibanco then acted as book-runners for a $350 million USD bond issuance for GeoPark that raised the capital to pay for the purchase. The Amerisur acquisition brought GeoPark into the Colombian Amazon and with it all of Amerisur’s dirty legacy in the Putumayo, including the Platanillo block where Indigenous Siona peoples allege that Amerisur polluted their waterways and compromised their health and livelihoods. GeoPark saw the acquisition as an opportunity to use the Platanillo block, the most commercially viable block in Amerisur’s operations, as a “steady cash flow base” while expanding oil production in other “highly prospective exploration licenses” i.e. expanding oil production to other blocks that overlapped Indigenous territory in the Putumayo (e.g. PUT-8, PUT-9, and PUT-12) where GeoPark had capital commitments in 2021.

5 teal charts with white numbers in the upper middle and name of five banks below each of the five charts

In 2022, Citibank took a leading role in bond issuances made by Eneva SA, including raising capital for the construction of TPP Azulão, a 295-megawatt natural gas-fired thermoelectric plant in the state of Amazonas. The plant has faced opposition from Brazilian environmental groups who point out that the plant was rushed through environmental permitting with no time for proper impact assessment for a project that threatens local air and water quality and will contribute significantly to greenhouse gas emissions. The plant will generate electricity from the Azulão gas fields, which started production in 2021 and will expand to meet the growing demand.

Citibank has played a deciding factor in supplying the financing and credibility for oil expansion in Ecuador, Colombia, and Brazil.

In each case, Citibank has played a deciding factor in supplying the financing and credibility for oil expansion in Ecuador, Colombia, and Brazil. For a bank that wants to “drive the transition to a net zero economy and make good on the promise of the Paris agreement,” as CEO Jane Fraser was recently quoted as saying, Citibank is not putting its money where its mouth is. Citibank should immediately stop financing the expansion of oil and gas in Amazonia instead of continuing to do business on a path that will certainly break the promise of staying under 1.5C envisioned by the Paris Agreement.

This is a re-publication of a case study on Citibank from the 2023 Capitalizing on Collapse report. Read the original case study published at here.


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Report: The Top Banks Financing Amazon oil and gas

A new report “Capitalizing on Collapse” by Stand Research Group shows the complicity of leading banks, including JPMorgan Chase, Citibank, Itau Unibanco, HSBC, and Banco Santander, in the deforestation of Amazonia.

Here are our top findings:

  • The culprits are clear: 8 fossil fuel banks are responsible for the majority of $20 billion USD in direct financing for oil and gas companies destroying the Amazon; 5% of banks provide over 55%.
  • Their influence runs deep: These banks act as enablers of influence and power of the fossil fuel industry in the region: including backing corruption, financing projects that will impact Uncontacted Peoples and Indigenous rights, or financing carbon bombs.
  • Big money flows through loopholes: Banks increasingly cannot trace how the money lent to oil and gas companies is spent, making it practically impossible to ensure financing compliance with their own environmental, social, and climate commitments.

As we enter a new era of climate chaos, it is imperative that banks financing oil and gas in Amazonia. Amazonia is a globally significant region for Indigenous stewardship, climate change mitigation, and biodiversity.

Read the full report at the’s website

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Report: Banking On Climate Chaos 2023 Shows Citi’s Outsized Fossil Financing

The 14th annual Banking on Climate Chaos report is the most comprehensive global analysis on fossil fuel banking. It reveals the truth of banks’ commitments to climate action by examining their financing of the fossil fuel industry. 

The report shows that U.S. banks dominate fossil fuel financing, accounting for 28% of all fossil fuel financing in 2022. It shows Citi as the second largest fossil fuel financier since the Paris Agreement was signed, with $332.91 billion in fossil fuel financing since 2016. Other key findings on Citi’s financing since 2016 include:

  • Over $8.67 billion to companies developing methane gas (LNG) projects in the U.S. Gulf Coast and globally. This includes Sempra, the developer of a new project in Texas opposed by local communities for polluting their neighborhoods, harming their health, and perpetuating environmental racism.
  • Second largest financier of Amazon oil and gas, funneling over $1.29 billion into oil and gas extraction in the Amazon region since 2017. A more recent report from Stand Research Group found that Citi’s Amazon oil and gas financing totals over $1.85 billion from 2009 to 2023.
  • Financed over $7.33 billion to Enbridge, the developer of the Line 3 and Line 5 tar sands pipeline projects that extend from Canada through Great Lakes states in the U.S. Indigenous leaders call the Line 5 pipeline “an act of cultural genocide” highlighting Enbridge’s failure to respect the UN-sanctioned right to Free, Prior, and Informed Consent of Indigenous communities impacted by its pipeline projects.
  • Pumped $345 million directly into the Coastal Gaslink fracked gas pipeline project on sovereign Wet’suwet’en land in so-called Canada, as well as $1.12 billion into TC Energy—its developer—and its subsidiaries since 2019. 
  • Poured over $1.78 billion into ConocoPhillips, the company behind the Willow oil drilling project on Alaska’s North Slope, which threatens the health and livelihoods of Indigenous communities fighting the project.

You can explore the data on Citi’s financing for different fossil fuel sectors and specific companies at Banking On Climate Chaos website.

Banking on Climate Chaos is authored by Rainforest Action Network, Indigenous Environmental Network, BankTrack, Oil Change International, Urgewald, Reclaim Finance, and Sierra Club, and endorsed by 624 organizations from 75 countries.

Read the full report at the Banking On Climate Chaos website

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Report: Citigroup: Top Financier of State-run Oil Companies in the Amazon

Indigenous leaders and federations directly impacted by oil drilling are calling on Citigroup to commit to exit Amazon oil and gas.

The Amazon is the last place on the planet that the oil industry and industrial extraction should be expanding and it is time for banks to step up and ensure that they aren’t complicit in harming Indigenous rights and the continued degradation of this critical region.

With the Amazon rainforest at the tipping point of ecological collapse, Citigroup’s lack of an exclusion policy and exit strategy on Amazon oil and gas presents a significant reputational risk

This is a re-publication from Read the original post here.

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