At the COP28 climate talks in Dubai this week, the debate will centre on one phrase – fossil fuels.
The message is clear: countries must stop burning fossil fuels, which are responsible for most of the carbon pollution heating the planet.
Despite having made net zero commitments, the majority of banks in the UK still pump money into oil and gas, making them a key culprit of the climate breakdown.
This means that you could unwittingly be helping to fund climate change through your bank account.
Here we round up the six worst offenders – and where to switch your money so it ISN’T funding climate change.
1. JP Morgan Chase
JP Morgan Chase is an American multinational banking corporation with a growing presence in the UK. In September 2021, the banking and investment giant launched UK-based digital bank Chase. Chase was crowned “Best British Bank” at the British Bank Awards 2023 despite its parent company being the least ethical provider in the world.
In the six years since the crucial Paris Climate Agreement was signed in 2016, JP Morgan Chase has topped the global list of fossil fuel bankers, funnelling a staggering $434 billion (£347 billion) into the industry. According to Bank.Green, it was also the world’s first funder of oil and gas extraction in the Amazon rainforest. Last year, Ethical Consumer magazine gave the Chase current account a “red” (worst) rating due to its parent company’s appalling record on the environment. JP Morgan Chase also owns investment platform Nutmeg.
2. Barclays
Barclays is the most popular current account in the UK – but it’s also by far the biggest contributor to climate change. In fact, the high street giant’s record on the environment is so poor, it is dubbed the “dirtiest bank in Europe” by campaigners.
Barclays is the UK and Europe’s biggest financier of fossil fuels, according to the Banking on Climate Chaos 2023 report. Between 2016 and 2022, it sank more than $190.5 billion (£148.4 billion) into oil, coal and gas projects.
From 2015 to 2020, Barclays provided $132 billion (£105 billion) for oil and gas drilling in the Arctic – one of the world’s most sensitive and important habitats. It is the seventh-largest global funder of tar sands and the biggest in Europe. In April 2023, Barclays finally committed to scaling down its investment in tar sands following intense pressure from shareholders. However, it came under fire for failing to tighten its oil and gas policy.
Barclays has committed to excluding all direct financing for new or material expansion of coal mines and plants. However, this leaves it open to keep financing other coal-related projects. Banking on Climate Chaos says Barclays’ updates on fossil fuel funding are “insufficient to meet the climate objectives set by the Paris Agreement.”
3. HSBC (including First Direct)
HSBC has long been one of the world’s biggest financiers of fossil fuels. From 2016 to 2022, it funded fossil fuel companies to the tune of $144 billion (£114 billion). This includes contributing $55 billion (£43.5 billion) to some of the world’s “most devastating fossil fuels projects” such as oil and gas extraction in Argentina’s Vaca Muerta region. Last year, following long-running investor pressure, HSBC made a landmark announcement that it will no longer finance new oil and gas fields.
However, Banking on Climate Chaos says HSBC’s thresholds (which only prevent it from financing SOME coal projects and companies) are not strict enough to meet the Paris Agreement’s climate objectives.
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4. Santander
From 2016 to 2022, Santander financed the fossil fuel sector with $51.1 billion (£39.8 billion).
In February last year, Santander updated its oil and gas commitments in February 2022. But Banking on Climate Chaos says it only “slightly improved” its policy on projects by excluding oil upstream Greenfield projects. The bank failed to exclude gas and the new policy only takes into account part of the oil value chain.
Santander is listed by Amazon Watch as a leading financier to mining companies that encroach upon Indigenous lands in Brazil, particularly in the Amazon rainforest. From Jan 2016 to October 2021 it gave $392 million (£305.6 million) in underwriting to Anglo American, Glenore, Minsur and Rio Tinto. It also had $191 million of shareholdings in Anglo American, Rio Tinto and Vale.
5. Natwest/ Royal Bank of Scotland
Natwest invested $16.98 billion (£13.24 billion) in fossil fuels between 2016 and 2022.
However, it is making strides for the better. Earlier this year, Natwest pledged to stop funding new customers looking to finance fossil fuel projects and will look to stop financing existing customers by the end of 2025.
6. Lloyds Bank
From 2016 to 2022, Lloyds bank funnelled around $15 billion (£11.9 billion) into fossil fuel companies. In October 2022, Lloyds pledged to stop financing fossil fuel ‘projects’ but made no such promise for fossil fuel ‘companies’.
This means that Lloyds may stop financing some oil rigs in regions like the Arctic ocean or Antarctica territories, but will still finance companies whose whole purposes is building and operating oil rigs in exactly those same places. Banks like Lloyds sometimes use ‘project’ divestment pledges like these as a first half-step to more meaningful commitments – but they have zero material impact.
On a positive, Lloyds says it is actively working with oil and gas clients to help them establish credible transition plans by the end of 2023
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Where to move your money for GOOD
A handful of banks have fully committed to ensure that your money won’t go to oil, gas or coal. The gold standard in ethical banking is Triodos Bank, which goes further than simply avoiding the bad stuff – it only invests your money to make a positive impact on the planet and society.
For ethical current accounts, we also like Nationwide Building Society, Cumberland Building Society, the Co-operative Bank and Engage, as well as digital challengers Starling and Monzo. A recent report by Which? named Nationwide, The Co-operative Bank and Triodos as their Eco Providers. While they don’t have any stand-out green credentials, they have no exposure to fossil fuels in their banking activities.
For ethical savings accounts, we like the above as well as Charity Bank, Coventry Building Society, Ecology Building Society, Gatehouse Bank and Tandem Bank.
