A report by Sierra Club and 3 other NGOs photographs the relationship between finance and renewable since 2016
(sustainabilityenvironment.com) – Since the Paris Agreement entered into force at COP27 last November, global finance has launched initiatives, set targets, promised support for the energy transition. If with a magic wand we could make disappear all the ads and words without the substance of these last 7 years would remain only a number, the only one that really counts: 7%. Seven percent is the best index of the relationship between finance and renewable: a cold, almost icy, anything but ready to take off.
Finance and renewable: the numbers
From 2016 to 2022, major global banks devoted only 7% of their investment to clean energy. The rest of the cake went into the fossils. This is revealed by a report by Sierra Club, Fair Finance International, BankTrack and Rainforest Action Network that analyzes the performance of the 60 largest banks in the world.
Nor is there a timidly positive trend. The 2016 figure is 7% while that of 2021 rises to 10%, but in the interim, the ratio between finance and renewable fluctuates repeatedly, without marking an increase, however small, that can be considered really consolidated.
As for loans and underwriting bonds, the total stops at $ 23.2 billion in 2016 and $ 34.5 billion in 2021. Very low figures. And the proportions don’t lie. In these 7 years, the total invested is $ 2,500 billion: of these, 2,300 are related to fossils, only $ 178 billion to clean energy.
But do global initiatives to accelerate the transition to truly sustainable finance serve? Not much, not at all, judging by the data in the report. There is even a paradox. The institutions that have joined Gfanz, the Glasgow Financial Alliance for Net Zero launched in 2021 and are considered the most important initiative globally to intertwine finance and renewable, invest in photovoltaics and wind less than their counterparts who have not joined.
“Many banks claim to continue financing fossil fuel customers to help them in their climate transition. These figures call this claim into question and show that banks must make serious efforts to finance the transition to clean energy,” said Adele Shraiman, representative of the Sierra Club’s Fossil-Free Finance campaign.