The study claims that banks are “greenwashing” trillions of dollars in fossil fuel financing

Trillions of US dollars are being ‘greened’ by banks providing loans and lines of credit to subsidiaries of fossil fuel companies in secretive jurisdictions, helping to hide the true extent of banking support for oil, gas and coal, a new NGO study Tax Justice Network appeared on Wednesday.

The report, produced in collaboration with the organization Banking on Climate Chaos, found that funds are being strategically channeled through “secret jurisdictions,” tax havens that allow companies to hide their activities and ownership structures from the public, the authors say.

“Subsidiaries of fossil fuel companies appear to be deliberately established in secretive jurisdictions to take advantage of weak regulatory transparency and favorable tax regimes,” they added.

Analysis of the fossil fuel financing of the world’s 60 largest banks found that 68% of the fossil fuel financing provided by these banks is given to subsidiaries in secret jurisdictions.

“It is a widespread practice among fossil fuel companies to establish financing subsidiaries in secret jurisdictions, from which they move funds to expand fossil fuel activities in other locations,” the Tax Justice Network report said.

“The report’s authors liken bank financing through secret jurisdictions to lending through a ‘hall of mirrors’ that makes it impossible for regulators, campaigners and the public to know for sure where the money is going and whether banks and fossil fuel companies are following the rules, restrictions and hard-won commitments to sustainable finance,” the NGO said in a statement.

Franziska Mager, Senior Researcher and Advocacy Leader at the Tax Justice Network and one of the authors of the report, commented:

“We are sounding the alarm on banks and fossil fuel companies greenwashing their finances to hide how much money they are really investing in fossil fuels. The situation is much worse than we have been led to believe, and the railings put in place on fossil fuel financing are easily jumped.”

Regional North American banks have done more deals to lend money to the oil, natural gas and coal industries in recent years, while many European lenders have either scaled back fossil fuel financing or pledged to reduce their exposure to this sector, according to available transparent data compiled by Bloomberg.

By Tsvetana Paraskova for Oilprice.com

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