Eight banks are responsible for most of the $20bn in financing for oil and gas production and expansion in the Amazon over the past 15 years, says a report published today by Stand.earth, a North American non-profit. Fossil fuel projects in the Amazon threaten the possibility of meeting international climate targets, biodiversity and the rights of indigenous populations, the report warns.
JPMorgan Chase, Itaú Unibanco, Citibank, HSBC, Santander, Bank of America, Banco Bradesco and Goldman Sachs are the eight banks listed by Stand.earth.
Together they represent just 5% of the financial institutions active in funding oil and gas projects in the Amazonian regions of Colombia, Ecuador, Peru and Brazil, but are responsible for over 55% of direct financing – the equivalent of $11bn – concludes the ‘Capitalising on Collapse’ report.
JPMorgan Chase tops the charts with an estimated $1.91bn in oil and financing in the Amazon between 2009 and 2023, says the report, which also accuses the bank of “extending over $18.8bn in loans and bond underwriting to oil and gas companies with operations in the Amazon”.
Stand.earth likewise places JPMorgan as the top backer of state-run oil companies, providing over $1.3bn to firms like Petroperú, PetroBras, and Ecopetrol.
JPMorgan Chase tops the charts with an estimated $1.91bn in oil and financing in the Amazon
Citibank is cited as the second largest bank for financing traced directly to Amazon oil and gas activities, with over $1.85bn between 2009 and 2023, says the report. Stand.earth also lists Citibank as the third largest overall financier for indirect financing – with an estimated $16.2bn since 2009 – the number one influencer in Amazon oil and gas deals over the past 15 years, and a “major financier” of global oil traders who trade Amazon oil.
The bank financed $4.3bn in the past 15 years in companies such as Gunvor, Shell, Trafigura, and PTTl, says the report.
“Citi continues to strengthen our environmental and social risk management policy to protect biodiversity and avoid deforestation in sensitive areas such as the Amazon,” Citibank told The Banker in an emailed statement.
It continues: “Citi is committed to supporting the global transition to a low-carbon economy and we are working closely with our clients to help decarbonise their businesses in line with the net zero commitments we made in 2021.”
HSBC is listed as the fourth biggest bank for financing traced directly to Amazon oil and gas activities, with $1.3bn for the industry between 2009 and 2023, and an estimated $15.5bn in indirect financing since 2009. The bank also financed $5.6bn in the past 15 years for oil trading companies like Shell and PTT, says the report.
The bank notes that the research predates its updated energy policy, published in December 2022. In line with the policy, “HSBC will no longer provide new finance or advisory services for new oil and gas fields, or any oil and gas fields and related infrastructure in environmentally and socially critical areas such as the Amazon Biome”, according to an HSBC spokesperson.
Five-point plan
The Stand.earth report outlines a five-point Amazon oil and gas exit plan, which calls on banks to immediately commit to no new oil and gas financing or investment in the Amazon. The plan asks banks to exit all existing oil and gas financing and investment, and exit all loans, letters of credit, and revolving credit facilities for oil traders active in the region by the end of 2025 at the latest.
It also calls on banks to shift fossil fuel financing to support for projects that will further the clean energy transition by engaging in deals in Amazon countries that support green energy, the just transition, debt-for-nature swaps, and Indigenous land stewardship.
Certain banks are moving in that direction, says the report. It highlights policies from BNP Paribas, Société Générale, Intesa Sanpaolo, and Standard Chartered to restrict financial support to companies active in Amazon oil and gas extraction, and commitments by BNP Paribas, ING, Natixis, and Credit Suisse to exclude trade financing for Ecuadorian Amazon oil from their portfolios.
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The Paris-headquartered International Energy Agency said in 2021 there must be no investment in new fossil fuel supply projects if the world is to have any chance of keeping global heating below the 1.5C threshold agreed in the Paris Agreement.
Likewise, a statement agreed at the World Conservation Congress in Marseille, France in 2021 recognised that “maintaining the ecosystem integrity of the Amazon biome is vital in order to prevent catastrophic biodiversity loss and climate change”.
The research “highlights that banks have a critical role to play in shifting the energy economics behind the climate crisis,” says Angeline Robertson, lead researcher at Stand.earth. “Amazonia is a key region for banks to introduce bold global policies.”
