Massive Bank Financing Fuels Climate Crisis, Neglects Climate Solutions-report
The report meticulously tracks financial flows from banks to fossil fuels and industrial agriculture in 134 Global South countries, revealing staggering figures.
Lilongwe, Malawi-In a sobering report released on September 13, 2023, international humanitarian organization ActionAid unveiled shocking statistics revealing the disheartening state of financial support for climate solutions in the Global South, writes Winston Mwale.
The report meticulously tracks financial flows from banks to fossil fuels and industrial agriculture in 134 Global South countries, revealing staggering figures.
The report, titled "How the Finance Flows: The Banks Fueling the Climate Crisis," exposes a stark contrast between the funds pouring into industries contributing to climate change and those allocated for climate mitigation and adaptation efforts.
"The climate has a cash flow problem," says the report, emphasizing that "far more of the world’s money is flowing to the causes of the climate crisis than to the solutions."
As the climate crisis continues to escalate, two sectors—fossil fuels and industrial agriculture—emerge as the largest culprits, yet they receive disproportionate financial backing.
This glaring inequality threatens to exacerbate the ongoing climate catastrophe.
ActionAid's report sheds light on the lesser-known climate impact of industrialized agriculture, highlighting that agriculture is the second-largest contributor to climate change.
Industrialised farming methods controlled by massive agribusiness corporations are chiefly responsible for the sector's substantial greenhouse gas emissions.
The report identifies the co-dependency of fossil fuels and industrial agriculture, illustrating how the former is used to produce agrochemicals, further intensifying their detrimental effects on the environment.
Countries in the Global South, which are already grappling with the disproportionate impacts of the climate crisis, are increasingly hosting fossil fuel and industrial agriculture projects.
These developments lead to conflicts over land and water, ecological destruction, and adverse health effects on local communities.
Furthermore, financing these unsustainable industries poses a risk of locking Global South countries into costly and debt-dependent infrastructure projects, diverting resources from sustainable development initiatives like renewable energy and agroecology.
The report meticulously tracks financial flows from banks to fossil fuels and industrial agriculture in 134 Global South countries, revealing staggering figures:
Bank financing for the fossil fuel industry in the Global South reached an estimated US$3.2 trillion in the seven years since the Paris Agreement on Climate Change was adopted.
The largest industrial agriculture companies operating in the Global South received US$370 billion over the same period.
Banks have provided an annual average of 20 times more financing to fossil fuels and agriculture activities in the Global South than Global North governments have contributed as climate finance to frontline countries.
Among the top financiers of fossil fuels and agribusiness are prominent global banks, including HSBC, BNP Paribas, Société Générale, Barclays, Citigroup, JPMorgan Chase, Bank of America, Industrial and Commercial Bank of China, China CITIC Bank, Bank of China, and Mitsubishi UFJ Financial.
Bayer, the German multinational that acquired Monsanto in 2018, stands out as the largest recipient of industrial agriculture financing in the Global South, receiving an estimated US$20.6 billion since 2016.
Other major beneficiaries include ChemChina (Syngenta), COFCO Group, Archer-Daniels-Midland (ADM), and Olam Group.
On the fossil fuel front, significant recipients include the State Power Investment Corporation, Trafigura, and major oil and gas companies such as Saudi Aramco, Petrobras, Eni, Exxon Mobil, BP, and Shell.
This alarming report serves as a wake-up call, highlighting the urgent need to redirect financial resources towards sustainable solutions to combat the climate crisis.
The findings underscore the immense responsibility that financial institutions bear in mitigating climate change and supporting the vulnerable communities most affected by it.
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