Africa climate crisis is fuelled by global banks
Source: Middle East Insurance Review | Oct 2023
The causes fuelling the climate crisis are receiving 20 times more financing than the solutions according to a new report by ActionAid.
The report How the Finance Flows: the banks fuelling the climate crisis said that fossil fuel and industrial agriculture industries in the Global South are receiving an annual average of 20 times more financing from banks than governments are receiving for climate solutions.
Banks have put $3.2tn towards the expansion of fossil fuels since the Paris Agreement, with $370bn being funnelled into the second major cause of climate change, industrial agriculture.
ActionAid secretary general Arthur Larok said, “The world’s money is flowing in the wrong direction – since the Paris Agreement, banks have provided 20 times more financing to fossil fuels and industrial agriculture activities in the Global South than Global North governments have provided as climate finance to countries on the front lines of the climate crisis. This is absurd and must stop.”
ActionAid global lead on climate justice Teresa Anderson said, “It is communities in Africa, Asia and Latin America who are suffering the impacts of decisions made in distant banking boardrooms. By financing fossil fuel and industrial agriculture in the Global South, banks are condemning communities to the cruel combination of landlessness, deforestation, water pollution and climate change.”
The report sets out the alternatives to these harmful practices. Solutions like renewable energy and agroecology are centred on real leadership from women and young people in the Global South but they must be supported by progressive public financing.
The report has called for banks to immediately stop project and corporate financing for all new deforestation, coal and fossil fuel expansion activities and phase out financing of all other fossil fuel and harmful industrial agriculture activities.
It said the national and regional governments must regulate the banking and finance sectors to stop the financing of fossil fuel expansion and scale up support and planning for just transitions to real solutions such as renewable energy and agroecology. M