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How the Finance Flows: The banks fuelling the climate crisis

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Find out more about ActionAid’s groundbreaking new research into the financial flows fuelling industrial agriculture and fossil fuels – the two industries that are the largest contributors to climate change. These finance flows enable these harmful industries to expand and thrive. Meanwhile, the solutions needed to address the climate crisis remain woefully underfunded. 

I’ve seen firsthand the devastation extreme weather can inflict on the lives of people who did very little to cause it, and this injustice is what spurs me on as a climate activist. What angers me the most is the lack of action that world leaders and huge polluters are taking to halt this crisis. 

Money continues to be pumped into harmful activities that threaten the existence of our planet and its people. This report reveals the trillions in harmful finance flowing to the Global South, fuelling the climate crisis and directly harming vulnerable communities. Above all, and crucially, it celebrates the climate heroines and heroes, the farmers and communities leading the way with agroecology and rooted resistance. 

Vanessa Nakate, Activist, writes in the foreword of our new report

    This flagship report of our campaign, Fund our Future, looks at the role played by major international banks in financing fossil fuels and industrial agriculture in the Global South. It also examines the current role of public financing in supporting fossil fuels and industrial agriculture, and how public finance could instead support a transition towards a more sustainable future based on renewable energy and agroecology.

    • In Part 1, we set out the context of the climate crisis to explain why system change is needed. We examine the climate impacts of fossil fuels and industrial agriculture, as well as their broader effects on the environment, gender equity and social justice.  
    • Part 2 looks at financial flows to industrial agriculture and fossil fuels that are harming the planet, and evidence that finance flows for fossil fuels are still far greater than those for climate adaptation and mitigation. Private financial flows can take various forms – including bond and shareholdings by asset managers, pension funds and insurance companies. For the purposes of this report, however, we focus on bank financing, in the form of loans and underwriting. We find that bank financing for the fossil fuel industry in the 134 countries of the Global South reached an estimated US$3.2 trillion dollars since 2016 when the Paris Agreement on Climate Change was adopted. Bank financing to the largest industrial agriculture companies operating in the Global South amounted to US$370 billion over the same period. 
    • Part 3 of the report examines how public finds are currently harming the public interest. We survey the financing offered to industrial agriculture and fossil fuels by state-owned banks and enterprises, development finance, public investment funds, and public subsidies.  
    • Real and sustainable solutions to address global energy and food requirements already exist, which we examine in Part 4.  
    • In the final section of this report, Part 5, we set out recommendations for banks and governments to support a just transition from funding the world’s destruction, to financing its hope for survival.  

    Read the report, share with your networks and join ActionAid on our journey to end the funding of our world’s destruction, and instead, #FundOurFuture.