Here’s the press release with all the major facts and figures you need:

New research shows that underwriting coal, oil & gas bonds is a glaring loophole in banks’ net-zero targets

  • Banks have underwritten $2.7 trillion worth of coal, oil and gas bonds since the 2015 Paris climate agreement. 
  • However, banks’ corporate bonds business is mostly not included in their climate targets, despite the outsized risk.

A new report launched today reveals that banks provide large amounts of financing for fossil fuel companies and their projects through the underwriting of bonds. Despite offering critical lifeblood to fossil fuel companies, the report highlights top banks’ continued role in arranging bonds and reveals underwriting activity is mostly left out of bank climate targets. 

The report calls into question why banks continue the practice, given the outsized reputational risk and impact on the planet, and calls for greater scrutiny on underwriting every time a bank publishes a new policy or target.

According to the Toxic Bonds and Bank on our Future campaigns, over 300 banks around the world have underwritten bonds worth $2.7 trillion for coal, oil and gas companies, generating an estimated $8.5 billion in fees for the service (according to Profundo) since the Paris climate agreement in 2015. 

Despite belonging to international climate initiatives such as the Net Zero Banking Alliance (NZBA), many major banks’ existing climate and fossil fuel policies and targets contain loopholes, either by excluding underwriting or only applying to new clients. This allows toxic bonds to slip through the net. However, under new UN criteria that the NZBA is required to follow, member banks will have to publish a transition plan in which they commit to ‘restrict the development, financing, and facilitation’ of new fossil fuel assets, including via underwriting.

Alice Delemare Tangpuori, senior strategist for Bank on our Future said: “Banks are performing sleight of hand, distracting investors and regulators with net-zero policies that are half-finished, while behind their backs continuing to do the majority of their fossil fuel financing via bond markets without scrutiny. Do banks think they can magically achieve their climate targets and ignore underwriting?

The majority of bank fossil fuel financing in the last six years has come from underwriting (51%), as opposed to lending.

The global bond market, where companies can borrow money from investors by selling debt assets, has become a safe haven for the fossil fuel industry. ‘Toxic bonds’ enable coal, oil and gas developers to get around lending restrictions and finance fossil fuel expansion under the radar. 

It’s also in banks’ interest to stop underwriting bonds for fossil fuel companies still in expansion mode. For example, Citi’s target to reduce the absolute emissions of its energy clients by 29% by 2030 is in jeopardy if it’s helping those very clients to increase emissions by financing the growth of their exploration and extraction businesses.

As bank lending for coal has tightened, the bond market remains a safe haven for fossil fuel companies to fund expansion. Dirty energy companies are using the corporate bond market as the back door to secure large amounts of cash for expansion projects. This has so far received too little scrutiny,” said Nick Haines, campaign manager for SumofUs.

Banks play a vital role in facilitating this process. Acting as underwriters, they advise fossil fuel companies issuing bonds and help market the bonds to investors. However, they open themselves up to legal risk and increased scrutiny from investors, who are drilling into banks’ financing and facilitation of fossil fuel companies.

 Two American banks are most involved in the transactions, since 2016:

  • JPMorgan Chase: arranged $103 billion in bonds for fossil fuels
  • Citigroup: arranged $99 billion in bonds for fossil fuels

This is followed by the Industrial and Commercial Bank of China (ICBC), which arranged $95 billion in bonds for fossil fuels since 2016.

The report demands banks include underwriting in addition to lending in all climate policies and financed emissions reduction targets. The report also calls on banks to urgently stop underwriting bonds for the Dirty 30 – a list of companies using the bond market to obtain cash to expand coal, oil and gas operations.

“Fossil fuel companies need banks, but banks don’t need fossil fuel companies. By supporting fossil fuel expansion, banks like JPMorgan Chase are complicit in climate chaos. Underwriting the bonds that finance these destructive projects not only threatens local communities, it puts the banks’ very own climate goals at risk,” said Adele Shraiman, campaign representative in the Sierra Club’s Fossil-Free Finance campaign. “By cutting off bonds as the last refuge of the fossil fuel industry, banks can stop coal, oil, and gas expansion and leave these polluting resources in the ground.”

The ECB has recently proposed to reshuffle its own corporate bond portfolio to favour less polluting companies, recognising the inherent risks of bonds issued by high-polluting companies. 


Notes to Editors

​​Bank On Our Future is a network of international organisations and social movements working together to secure a climate-safe future for everyone. We’re committed to pressuring the biggest banks to align their business practices with a fair and habitable future.


Toxic Bonds is a network of civil society organisations working together to secure a climate-safe future for everyone. We exist to draw attention to the role the bond market plays in fuelling the climate crisis, and to help all market players transition their businesses away from climate destructive investments.