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**A [new report launched today](https://s3.amazonaws.com/s3.sumofus.org/images/Toxic-Bonds-Bank_-Underwriting-Report_FINAL.pdf) by the Toxic Bonds and Bank on our Future campaigns shows banks have underwritten $2.7 trillion of fossil fuel bonds since the 2015 Paris Climate Agreement - offering critical lifeblood to fossil fuel companies. The report reveals that underwriting bonds for fossil fuel companies is a glaring loophole in banks’ net-zero targets and needs greater scrutiny.** 

Despite international climate initiatives such as the Net Zero Banking Alliance, 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.

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.

Banks must include underwriting in addition to lending in all climate policies and financed emissions reduction targets, as well as urgently cease underwriting bonds for coal, oil and gas expansionists.

*Update 13/07/2022 upon release it was brought to our attention that an interpretation of one of the tables in the original report is incorrect. The version here is now updated.*

Read the new report on from Toxic Bonds and the Bank on our Future campaigns

How banks are breaking their Net Zero pledges to finance climate chaos

Behind each company planning new oil & gas ventures, there are banks, investors and insurers without whom these projects could not be realized.



The Global Oil & Gas Exit List (GOGEL) is a public database that identifies the largest oil & gas expansionists and the companies responsible for the most controversial forms of oil & gas production. It provides the information financial institutions need to stop enabling fossil fuel expansion and begin steering towards an oil & gas exit.



GOGEL was designed to help financial institutions become responsible climate actors. It provides detailed information on 887 companies operating in the upstream and/or midstream sectors of the oil & gas industry. GOGEL will be updated each fall.



[➔ To access the data, please see here](https://gogel.org/)

GOGEL is a database of information on the largest and most controversial oil & gas companies.

Global Oil and Gas Exit List 

More and more banks, insurers and investors are implementing policies to restrict support to the oil and gas industry. But are these policies robust enough?

The Oil and Gas Policy Tracker is designed to track good practices by financial institutions worldwide, as well as detect loopholes and flaws to ensure the financial sector is effectively contributing to the 1.5°C climate goal. This tracker rates the oil and gas exclusion policies adopted by financial institutions on a consistent and transparent scoring grid built upon three main criteria.

The Oil & Gas Policy Tracker covers all the biggest banks, (re)insurers, asset owners and asset managers globally, in 25 countries.

* The top 60 banks according to “The world’s 100 largest banks‘‘ ranking 
* The top 30 insurers covered in the 2021 Scorecard on Insurance, Fossil Fuels & Climate Change
* The top 30 asset managers according to the “The world’s largest 500 asset managers” ranking 
* The top 30 asset owners according to “The Asset Owner 100” ranking

Therefore, the Oil & Gas Policy Tracker assesses all the majors financial institutions that have signed the Net Zero Banking Alliance (NZBA), the Net Zero Asset Owner Alliance initiative (NZAO), the Net Zero Asset Managers initiative (NZAM) and the Net-Zero Insurance Alliance (NZIA).

[➔ To access the tracker, please click here](https://oilgaspolicytracker.org/)

*Photograph taken by Koala Kollektiv activists taking action outside the European Central Bank in Frankfurt, Germany calling for the central bank to stop funding fossil fuels and climate chaos. The image has been edited.*

The Oil and Gas Policy Tracker is designed to track good practices by financial institutions worldwide, as well as detect loopholes and flaws to ensure the financial sector.

Oil and Gas Policy Tracker

Through its allocation of resources, the finance industry is in a unique position to help or hurt our climate. But financial institutions that want to move coal out of their portfolio, face a very practical hurdle: lack of information. 

This is where the Global Coal Exit List (GCEL) comes in. 

The Global Coal Exit List (GCEL) was devised to help financial institutions navigate the complicated landscape of coal-based business models. Companies on the GCEL represent 90% of the world’s thermal coal production and the world’s coal-fired capacity. It offers key statistics on over 1,000 parent companies and around 1,800 subsidiaries operating along the thermal coal value chain. 

The research shows:

* Commercial banks provided loans and underwriting services worth over US$ 1.5 trillion to companies listed on GCEL 2021 (between January 2019 and November 2021).  
* Institutional investors held bonds and shares worth over US$ 1.2 trillion in GCEL companies (as reported in November 2021).

**[➔ To look up these banks and investors see here](https://coalexit.org/finance-research)**

GCEL is a tool showing the banks and investors still financing the coal industry.

Global Coal Exit List 

 **The coal policy tool:**

* Counts, compares and rates the coal policies adopted by banks, (re)insurers, asset owners and asset managers.
* Enables clients, media, financial institutions and other stakeholders to easily navigate the coal policy jungle.
* Aims at ensuring high quality coal policies that effectively contribute to keep global warming below 1.5°C.

**Coal policies are rated according to 5 criteria:**

* The first criteria covers the exclusion of coal mines, coal plants, and coal infrastructure.
* The second criteria addresses the exclusion of all financial services to companies planning new coal mines, coal plants or coal infrastructure projects.
* The third criteria covers the exclusion of companies which are most exposed to the coal sector, based on their share of revenues or electricity production from coal.
* The fourth criteria covers the exclusion of the largest coal producers and largest coal plant operators.
* The fifth criteria addresses the quality of the coal phase-out strategy.

The analysis focuses on thermal coal and not metallurgical coal.

[➔ To access the tool, please see here](https://gogel.org/)

This tool analyses the quality of coal policies thus highlighting the good, bad and in-between of the coal policies adopted by financial institutions.

Coal Policy Tool

The Complicity in Destruction IV, research by the Association of Indigenous Peoples of Brazil (APIB) and Amazon Watch, found that international financiers, including BlackRock, Vanguard and Capital Group, poured USD $54.1 billion into eight large mining companies, including Vale, Anglo American, and Belo Sun.



Despite statements by giants such as Vale and Anglo American over the last few years claiming that they would withdraw their applications for research and mineral exploration in these territories, this research shows that many applications remain active in the Brazilian National Mining Agency’s (ANM) system; in some cases, there was even an increase in the number of requests.



The reports highlights that U.S.-based corporations remain among the main financiers complicit in the destruction, with institutions such as BlackRock, and Vanguard holding bonds in mining companies with interests in Indigenous lands and history of rights violations. 



[➔ Read the report here](https://amazonwatch.org/assets/files/2022-complicity-in-destruction-iv.pdf)

Report reveals investors and bondholders of mining companies threatening the Amazon and Indigenous rights.

 Complicity in Destruction

In July 2021, the European Central Bank (ECB) unveiled its [1st climate roadmap](https://reclaimfinance.org/site/en/2021/07/08/the-ecb-takes-a-raincheck-on-urgent-climate-action/), allegedly taking the lead in the snail-pace race for the “greening” of central banking. Throughout 2020 and 2021, just as it was building this roadmap and pledging its goodwill on climate issues, the bank was buying unprecedented amounts of assets in response to the Covid pandemic. 



While these exceptional purchases were an opportunity for the ECB to start putting its green promises into practice, the bank chose to go in the opposite direction. Indeed, covid-related corporate purchases notably [benefited five oil and gas majors](https://reclaimfinance.org/site/wp-content/uploads/2021/10/Report-Spreading-the-Fossil-Fuel-Pandemic-ECB-QE.pdf) – Shell, TotalEnergies, Repsol, Eni, OMV – despite their plans to massively develop their fossil fuel production.



The report highlights that by the time these companies pay the ECB back, most of the projects they are currently building will need to be shut down before being amortized to respect climate goals, thus becoming effectively stranded.



What an opportunity missed by the ECB in building back better!



[➔ Read the report here](https://wwfint.awsassets.panda.org/downloads/wwf_report_can_dcm_save_the_planet__final_2021_09_27_.pdf)

A short story by Reclaim Finance on how the ECB covid asset purchases is supporting oil and gas expansion.

Fossil fuel pandemic

The bond market is often sidelined in comparison with the equity market with regard to questions related to climate change and sustainability. This could be seen as surprising given that the global bond market is twice the size of the equity market. This SSFC and AFII insight on the bond market shows that there are obvious links to the climate and that there is considerable potential for investors to use their bond mandates to contribute positively to climate change-related investments.



The report also identifies questions that require further investigation, not least through academic research. Additionally, the report presents ways for investors to use bond market mechanisms to include climate perspectives and to push the agenda in this area. It also suggests topics for further investigation in future research.



[➔ Read the report here](https://www.stockholmsustainablefinance.com/the-bond-market-its-relevance-and-functionality-for-the-climate-transition/)

This report explains the importance and functionality of the bond market on climate change. Stockholm Sustainable Finance Centre (SSFC) and Anthropocene Fixed Income Institute (AFII)

Bond Market's relevance

In today’s capital markets, engagement with firms on ESG issues is largely seen as an activity for equity investors.The view as expressed in the report is that engaging on climate issues should be the responsibility of debt as well as equity holders, and indeed of all finance providers.

But can bondholder engagement with companies be effective?



It is the conviction as expressed in this report that corporate bond investors, especially signatories to the CA100+, should co-ordinate and utilize the power they wield during debt refinancing and issuance to communicate to issuers that, unless a robust strategy to manage climate-related risks and impacts is adopted, they will cease to invest in a company’s bonds.



Through the summer and autumn of 2018, ShareAction undertook a series of interviews with asset owners, bond managers, issuers and other experts in the field to explore their thinking on the opportunities and responsibilities that arise for bond investors in relation to climate change and climate-related risks. ShareAction tested the hypothesis that bond investors should use their leverage to press for corporate management teams to minimize climate related risks and align their business strategies with the Paris Agreement.



This report summarizes the insights and findings from 22 in-depth interviews with bond market experts. A number of recommendations for asset owners, asset managers, financial market supervisors and policy makers has been outlined in this report.



[➔ Read the report here](https://api.shareaction.org/resources/reports/Sleeping-Giants_BondInvestors_2019.pdf)

This report examines corporate bond investors' motivation to speed up alignment with the Paris Agreement.

Bond investors readiness for climate action

The WWF report reveals that while large international banks make ‘zero carbon’ pledges, their investment banking arms often continue with a business as usual approach, ignoring the environmental impacts of most of the bond deals they arrange or underwrite. It also highlights that the vast majority of bonds traded on debt capital markets still provide very little, if any, information on their environmental impacts, with only 10% of global bond issuances in 2021 showing specific labeling of their environmental, social or sustainability benefits.



This report argues that global debt capital markets can and must leverage their power to address the environmental challenges of our generation within this critical ‘make-or-break’ decade to 2030.  It also highlights that disastrous climate change and the alarming degradation of biodiversity and ecosystems need to be addressed urgently.



Through this report, WWF has also identified 'Rapid Change Levers' for key stakeholders to pull and points out how rapid change is already happening across their five calls to action.



[➔ Read the report here](https://wwf.panda.org/wwf_news/?3781466/Debt-capital-markets-can-do-more-to-prevent-climate-catastrophe-and-nature-loss)

The report shows how debt capital markets can be harnessed towards climate action. 

Can Debt Capital Markets save the planet?

In its earlier paper, Antropocene Fixed Income Institute (AFII) proposes a counterparty de-selection algorithm – “The Box”1 – as a dynamic and low- cost approach that asset managers, asset owners and bond issuers with climate goals can use to steer fossil fee focused banks into better climate alignment over time. This paper develops the algorithm that dynamically deselects banks as counterparties using a repeating “worst-of” method. 



The approach has the advantage of being quick to implement, quantitatively based, low cost as well as giving rapid positive feedback to at- risk banks’ potential efforts to reduce non-climate aligned debt capital markets activities. As such, it should be an effective way for asset managers, -owners and bond issuers to get better climate alignment from their financial services providers.



Based on subscriber feedback, AFII further developed the note to provide additional league tables, and covered not just fossil fee revenues (as was done in the earlier paper) but also accounted for potential green revenue generation.



[➔ Read the document here](https://img1.wsimg.com/blobby/go/946d6aac-e6cc-430a-8898-520cf90f5d3e/AFII_Net_Fossil_Fees.pdf)

This note provides league tables as a basis for a potential counterparty selection mechanism. 

Net green/fossil bond syndication league tables

The 'Banking on Climate Chaos' report, developed by a number of civil society organizations,reveals that the world’s biggest banks continued to pour billions into fossil fuel expansion in 2021. This underscores the stark disparity between public climate commitments being made by the world’s largest banks, versus the reality of their largely business-as-usual financing to the fossil fuel industry.



The report documents that in the six years since the Paris Agreement was adopted, the world’s 60 largest private banks financed fossil fuels with USD $4.6 trillion, with $742 billion in 2021 alone. 2021 fossil fuel financing numbers remained above 2016 levels, when the Paris Agreement was signed. 



Of particular significance is the revelation that the 60 banks profiled in the report funneled $185.5 billion just last year into the 100 companies doing the most to expand the fossil fuel sector. The report also highlights that in 2021, fossil fuel lending and underwriting continued to drive shocking human rights abuses, particularly in Indigenous, Black, and Brown communities.



[➔ Read the report here](https://www.ran.org/wp-content/uploads/2022/03/BOCC_2022_vSPREAD.pdf)

The report analyzes fossil fuel financing from the world’s 60 largest commercial and investment banks.

Banking on Climate Chaos

Financial institutions with over $70 trillion in assets have so far pledged to achieve net zero portfolios and loan books by 2050, including meeting ambitious interim 2030 targets.



This working paper, developed by the Oxford Sustainable Finance Programme at the University of Oxford’s Smith School of Enterprise and the Environment, reveals that passive corporate bond funds not only hold fossil fuel assets, but directly finance them by buying large quantities of new bonds issued by fossil fuel companies. The report shows that about 14 percent of the value of new bonds bought by the largest US corporate bond ETFs between 2015 and 2020 were issued by carbon-intensive companies in the oil and gas, utilities and coal mining sectors.



The [Financial Times article](https://www.ft.com/content/5f35f3b4-4509-4dc6-985c-46af5187c27d) that covers the report points out that newly issued corporate bonds are often sold at a discount to attract buyers, and ETF managers can buy newly issued bonds before they are included in an index. Purchasing the newly issued bonds, as pointed out in the Financial Times article, effectively means that the funds can gain an additional performance advantage from investing in these carbon-intensive industries.



The report recommends that as primary markets can be considered the point of maximum leverage, ETF providers serious about climate change must consider how they can align portfolio flows.



[➔ Read the report here](https://www.smithschool.ox.ac.uk/publications/wpapers/workingpaper21-05.pdf)

The working paper measures the proportion of total primary market financing that occurs in carbon-intensive sectors.

Breaking the Bond

The report 'Fossil Assets: The new subprime' covers the 11 biggest banks in the eurozone: BNP Paribas, Crédit Agricole SA, Société Générale, Banque Populaire Caisse d ́Epargne (BPCE), Deutsche Bank, Commerzbank, UniCredit, Intesa Sanpaolo, Santander, BBVA and ING; and identifies banks’ financial assets linked to fossil fuels. The report reveals that major European banks accumulated EUR 532 billion in fossil fuel assets – representing 95% of their total equity.



It also highlights that due to a nearly non-existent framework, large companies can and are using green bonds as a greenwashing tool with the complicity of banks, and that international banks have provided massive new funding — credits and issues of shares and bonds — to companies in the coal, oil and gas sectors.



The report underlines the threat such a situation poses to the transition to a low-carbon economy, potentially snowballing into a financial crisis, with severe economic and social impacts.



[➔ Read the report here](https://reclaimfinance.org/site/wp-content/uploads/2021/06/Report-Fossil-Assets-the-new-subprimes.pdf)

This report identifies the financial assets linked to fossil fuels of the 11 biggest banks in the eurozone. 