Global South getting 20 times more financing in fossil fuel industries than climate solutions: Study

The fossil fuel and industrial agriculture industries in the Global South are receiving an annual average of 20 times more financing from banks than governments are receiving for climate solutions, according to a study conducted by ActionAid.

Since the adoption of the Paris Agreement on Climate Change in 2016, banks have put $3.2 trillion towards the expansion of fossil fuels, number one cause of climate change and $370 billion in industrial agriculture, second contributor to climate change, the study found. 

Top banks funding the climate crisis include HSBC, Citigroup and JP Morgan Chase among others, according to the study. 

The study was revealed in the launching of a global campaign on climate justice called 'Fund Our Future' in Dhaka on Tuesday (5 September), reads a press release. 

The report found the top banks from each region funding fossils fuels and industrial agriculture in the Global South are from Europe: HSBC, BNP Paribas, Societe Generale, Barclays; from Americas: Citibank, JPMorgan Chase, Bank of America; from Asia: Industrial and Commercial Bank of China, China CITIC Bank, Bank of China and Mitsubishi UFJ Financial. 

The report also says the largest recipient of industrial agriculture financing in the Global South is Bayer which has received an estimated $20.6 billion in financing for its industrial agriculture operations in the Global South since 2016.

In a panel discussion held during the campaign launch, the chief guest, Saber Hossain Chowdhury, chairman of the Parliamentary Standing Committee on the Ministry of Environment, Forest, and Climate Change, said, "The biggest challenge of the climate crisis is that we are creating problems faster than the solutions. We need to find an overall framework to address the problems and ensure effective regulation of the policies. 

"Bangladesh has no clear net zero greenhouse gas emission target; that needs to be set up and greater coordination between the ministries is required to have a sustainable solution. We can't rely on other nations for solutions; we have to do the right things. For smart Bangladesh we have to make smart choices." 

Dr Saleemul Huq, director of International Centre for Climate Change and Development, said, "We have to persuade our government to put pressure on the polluters of the world. There are certain governments in the world who speak on behalf of the polluters. 

"Rich people are creating problems and the poor people are suffering. Let's not fool ourselves that this is going to be easy. Every one of us has to be a warrior to fight against climate injustice." 

Farah Kabir, country director of ActionAid Bangladesh, said. "This report exposes how banks and financial institutions are the key drivers behind our climate crisis. We need to set targets, accountability, and monitoring. We ask the decision makers to fund our future responsibly to heal the world. We must ask for justice and continue our fight with collective efforts." 

Dr Khondaker Golam Moazzem, research director of CPD, said, "Steps need to be taken to shift from fossil fuel subsidies and utilise that for alternative sustainable routes. It is good that the government is setting targets for renewable energy, but if our ultimate target is fossil fuel reduction, we also need a reduction target." 

Khaondekar Morshed Millat, former director of Sustainable Finance Depart of Bangladesh Bank, said, "The central bank needs to be the watchdog for our environmental future. Sustainability rating of Banks needs to reevaluated. Just as rivers of money are fueling the climate crisis, the regulatory mussel should steer banks toward sustainable and renewable investment."

Anwar Farooq, former secretary of the Ministry of Agriculture; Shubasish Barua, head of Impact Business Green Delta Insurance Company Limited; Abul Kalam Azad, former principal secretary at Prime Minister's Office; Dr Atik Rahman, executive director of Bangladesh Centre of Advanced Studies; and Samia Chowdhury, CEO of MTB Foundation also spoke in the panel discussion among other distinguished panellists. 

The report calls for banks to immediately stop projects 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. 

The report further says national and regional governments must 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.