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Jul 2022

Companies finance fossil fuel production

Source: Middle East Insurance Review | May 2022

The world’s 30 biggest listed financial institutions are undermining their net zero goals by continuing to fund fossil fuel expansion and lobbying to weaken emerging sustainable finance policy, according to a new analysis by climate think tank InfluenceMap.
A press release published by InfluenceMap said the report shows that despite a significant increase in its public support for climate action, the finance sector is reluctant to introduce meaningful fossil fuel exclusion policies and has enabled at least $740bn of financing for the fossil fuel production sector during the past two years.
The 30 financial institutions include 27 with banking arms, 25 with asset management businesses and two global insurers. The report examines their corporate lending, equity and bond underwriting and asset management activities in 2020 and 2021 and how these activities align with their climate reporting, policies and commitments. It also examines their lobbying on climate and sustainable finance policy both directly and indirectly via industry associations.
All except China’s Ping An Group have signed up to the Glasgow Financial Alliance for Net Zero, which commits them to set substantial 2030 decarbonisation targets and achieve net zero by 2050. This is in line with science-based guidance from the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency, which have both stated that a rapid phase-out of fossil fuel exploration and production is essential to limiting global warming.
Only 11 financial institutions have, however, set concrete 2030 climate targets across multiple sectors. Only seven financial institutions have set thermal coal exit plans in line with IPCC 1.5°C guidelines and only four have committed to reducing their oil and gas exposure by 2025. However, some of these policies contain loopholes allowing for continued fossil fuel financing under certain circumstances. M 

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