{"id":51303,"date":"2025-06-22T12:13:18","date_gmt":"2025-06-22T06:43:18","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=51303"},"modified":"2025-06-23T17:46:00","modified_gmt":"2025-06-23T12:16:00","slug":"surge-in-fossil-fuel-financing-by-global-banks-undermines-net-zero-goals","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/surge-in-fossil-fuel-financing-by-global-banks-undermines-net-zero-goals\/","title":{"rendered":"Surge in Fossil Fuel Financing by Global Banks Undermines Net Zero Goals"},"content":{"rendered":"<h2><b>2025 Fossil Fuel Finance Report Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><b>2025 Fossil Fuel Finance Report<\/b><span style=\"font-weight: 400;\"> by the Banking on Climate Chaos Coalition reveals that the world\u2019s 65 largest banks collectively committed $869 billion to fossil fuel companies in 2024, up from $707 billion in 2023.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This growth, including the involvement of <\/span><b>India&#8217;s SBI<\/b><span style=\"font-weight: 400;\">, has sparked <\/span><b>global concerns over climate goals<\/b><span style=\"font-weight: 400;\">, especially amid policy rollbacks and increasing global temperatures.<\/span><\/li>\n<\/ul>\n<h2><b>Key Highlights of the Report<\/b><\/h2>\n<ul>\n<li><strong>Rising fossil fuel financing:<\/strong>\n<ul>\n<li><strong>Global financing surge:\u00a0<\/strong>In 2024, global fossil fuel financing<strong>\u00a0increased by 22.8% over 2023<\/strong>.<\/li>\n<li><strong>Top contributor:\u00a0<\/strong>JPMorgan Chase topped the list, contributing $53.5 billion, a $15 billion increase from 2023.<\/li>\n<\/ul>\n<\/li>\n<li><strong>SBI\u2019s climate commitments vs actions:<\/strong>\n<ul>\n<li><strong>Commitments:<\/strong>\n<ul>\n<li>State Bank of India (SBI) aims for\u00a0<strong>net zero by 2055.<\/strong><\/li>\n<li>Target of 7.5% green advances by 2030 of domestic gross advances.<\/li>\n<li>As of March 2025, SBI had extended \u20b920,558 crore in\u00a0<strong>sustainable finance.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Actions:<\/strong>\u00a0The report highlights that SBI&#8217;s position rose to\u00a0<strong>47th rank<\/strong>, with a\u00a0<strong>total fossil fuel financing of $2.62 billion<\/strong>, marking a $65 million increase from 2023.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b>Contradictions and Policy Backtracking<\/b><\/h2>\n<ul>\n<li><b>Policy rollbacks in global banks:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">American lender <\/span><b>Wells Fargo<\/b><span style=\"font-weight: 400;\"> scrapped plans to become net zero by 2050.<\/span><\/li>\n<li><b>European banks<\/b><span style=\"font-weight: 400;\">, earlier seen as climate-progressive, also showed weakening sector policies.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Six largest <\/span><b>US banks<\/b><span style=\"font-weight: 400;\"> exited the UN Net-Zero Banking Alliance.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>US policy shift under Trump administration:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Withdrawal from <\/span><b>Paris Agreement <\/b><span style=\"font-weight: 400;\">(effective early 2026).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Exit from the <\/span><b>Network for Greening the Financial System<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li><b>Proposed legislation<\/b><span style=\"font-weight: 400;\"> to cut clean energy tax incentives.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">This rollback comes despite <\/span><b>2024 being the hottest year<\/b><span style=\"font-weight: 400;\"> ever recorded.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b>India\u2019s Coal Financing Blind Spot<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">As per Climate Risk Horizons,<\/span><b> Indian banks largely lack coal exclusion policies<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Only Federal Bank and RBL Bank among BSE\u2019s top 1000 banks have such policies.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite renewables now being cheaper than coal, <\/span><b>banks continue fossil fuel investments.<\/b><\/li>\n<\/ul>\n<h2><b>Long-Term Concerns<\/b><\/h2>\n<ul>\n<li><b>Lock-in effect of infrastructure:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">As per IEA 2024, achieving net zero by 2050 demands <\/span><b>halving fossil fuel investment by 2030<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li><b>New investments risk locking economies<\/b><span style=\"font-weight: 400;\"> into decades of fossil fuel dependency.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Mergers and acquisitions (M&amp;A) financing:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Acquisition-related fossil fuel financing rose to $82.9 billion.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Although not directly creating new infrastructure, such financing strengthens fossil fuel companies\u2019 market dominance, delaying the global phase-out essential for climate mitigation.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b>Cumulative Trends since Paris Agreement<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>From 2016\u20132025<\/b><span style=\"font-weight: 400;\">, the 65 banks have contributed $7.9 trillion in fossil fuel financing.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Since 2021<\/b><span style=\"font-weight: 400;\">, $3.3 trillion has been lent to fossil fuel businesses \u2014 a persistent trend despite global climate urgencies.<\/span><\/li>\n<\/ul>\n<h2><b>Conclusion<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The rise in fossil fuel financing by global and Indian banks in 2024 signals <\/span><b>a critical policy regression<\/b><span style=\"font-weight: 400;\"> against the backdrop of an escalating climate crisis.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While financial institutions proclaim net-zero targets, the widening gap between climate pledges and actual financing behavior underscores the <\/span><b>urgent need for enforceable climate-aligned banking regulations<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">This is especially important as <b style=\"font-size: inherit;\">time runs out to meet global sustainability commitments.<\/b><\/li>\n<\/ul>\n<p><b>Source: <\/b><a href=\"https:\/\/indianexpress.com\/article\/business\/worlds-biggest-banks-increased-fossil-fuel-financing-162-billion-10080329\/\" target=\"_blank\" rel=\"nofollow noopener\"><b>IE<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The 2025 Fossil Fuel Finance Report reveals that the world\u2019s 65 largest banks collectively committed $869 billion to fossil fuel companies in 2024, up from $707 billion in 2023.<\/p>\n","protected":false},"author":18,"featured_media":51457,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[970,60,22,59],"class_list":{"0":"post-51303","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-2025-fossil-fuel-finance-report","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/51303","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=51303"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/51303\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/51457"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=51303"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=51303"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=51303"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}