The world’s largest 65 banks dedicated $869 billion in 2024 to firms within the fossil fuels sector, up from $707 billion in 2023, with State Financial institution of India (SBI) one in every of practically 50 massive banks that elevated their financing for a similar in comparison with the earlier yr.
“This progress in fossil gasoline finance is troubling as a result of new fossil gasoline infrastructure locks in additional a long time of fossil gasoline dependence. Because the IEA’s (Worldwide Vitality Company) 2024 Vitality Funding Outlook report states, ‘(a)chieving web zero emissions globally by 2050 would imply annual funding in oil, gasoline, and coal falls by greater than half’ by 2030,” mentioned the Fossil Gasoline Finance Report 2025 by a bunch of eight setting organisations collectively referred to as Banking on Local weather Chaos Coalition.
To make certain, SBI accounted for under a fraction of the whole fossil gasoline financing in 2024 and solely noticed a small improve final yr in comparison with different lenders. As per the report, SBI was the one Indian financial institution within the prime 65 with a $65 million improve in fossil gasoline financing in 2024 from 2023 to $2.62 billion, placing it on the forty seventh spot out of the 65 banks, up from 49 in 2023.
Compared, JPMorgan Chase retained its prime spot within the listing because it gave $53.5 billion to fossil gasoline firms final yr, $15 billion greater than it did in 2023. That is greater than SBI’s complete fossil gasoline financing of $10.6 billion from 2021 to 2024.
Earlier this yr in February, SBI Chairman CS Setty mentioned the financial institution is focusing on to be web zero by way of emissions by 2055. Earlier than that, the financial institution is aiming to have at the least 7.5 per cent of its home gross advances to be inexperienced advances by 2030. As on the finish of the quarter ended March, SBI’s home advances stood at Rs 36.02 lakh crore. It had sanctioned a mixed fund and non-fund-based restrict of Rs 20,558 crore for sustainable finance actions.
In accordance with Bengaluru-based think-tank Local weather Threat Horizons, coal financing is a “big blind spot” for Indian banks. “Among the many prime 1000 BSE-listed banks as of March 2024, solely Federal Financial institution and RBL Financial institution have adopted specific coal exclusion or phase-out insurance policies… The economics are clear: coal is not a budget power supply it as soon as was. Renewable power and storage can now present electrical energy at or under the price of coal, with continued price declines probably,” the think-tank’s analysts mentioned in a submit in March 2025 warning that Indian banks had been falling behind within the sustainable finance race.
Hottest yr
The report discovered that fossil gasoline financing by the world’s largest banks rose in 2024 after declining in 2023 got here amid watering down of exclusion insurance policies and coverage rollbacks. “…what was as soon as largely a North American pattern is now going international. European banks –usually seen as extra progressive on local weather as a result of high quality of their sector insurance policies – additionally started backtracking,” it mentioned. In March, American lender Wells Fargo scrapped plans to change into web zero by 2050, weeks after US President Donald Trump signed an government order saying the nation’s withdrawal from the Paris Settlement.
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The US’ withdrawal — which is able to take impact in early 2026 and see the world’s largest financial system be part of Iran, Libya, and Yemen as these not celebration to the Paris Settlement — has been a part of a collection of steps taken by the Trump administration to advertise fossil fuels even within the face of 2024 being the most popular yr ever recorded.
In January, the US Treasury Division withdrew its membership of the Community of Central Banks and Supervisors for Greening the Monetary System —a voluntary international coalition that appears to mobilise inexperienced finance and develop suggestions for climate-risk administration within the monetary sector — as a part of the aforementioned government order signed by Trump. And forward of Trump’s inauguration, the US’ six largest banks left the UN-sponsored Web Zero Banking Alliance.
A committee of the US Senate additionally authorised draft laws this week that might hit key tax incentives for clear power.
Development reversal
The rise in fossil gasoline financing by banks in 2024 marked a reversal of reducing lending to the section. Whereas practically $3.3 trillion has been made obtainable to fossil gasoline companies since 2021, the 65 banks within the 2025 report have dedicated $7.9 trillion in fossil gasoline financing for the reason that Paris Settlement got here into drive in 2016.
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In 2024, financing for acquisitions elevated by $19.2 billion to $82.9 billion. Whereas mergers and acquisitions don’t instantly create new infrastructure, “this consolidation — for which financial institution financing is crucial — is usually an try and develop the ability and competitiveness of fossil gasoline firms, at a time when the world really must part out fossil fuels”, the report mentioned.