The biggest carbon-emitting countries have a crucial role to play in this transition. Because countries have indicated ambitious transition targets, their financial institutions are integral to enabling conditions that would jumpstart and facilitate ongoing low-carbon development.

Our latest research finds that financial institutions provided 3.46 trillion USD in loans and underwriting services to selected energy companies from January 2016 to July 2022. 92% of this (3.2 trillion USD) was provided to companies engaged in fossil fuels, and only 8% (47 billion USD) was provided to companies engaged in renewable energy.

For most international financial institutions, only 2-5% of their financing was attributable to renewable energy. For the Chinese banks, the Bank of China and the Industrial and Commercial Bank of China (ICBC), the proportions of renewable energy financing were 10% and 24%, respectively. However, these amounts are not enough for the energy transition we need.

ICBC specifically provided 70 billion USD in loans and underwriting services to the selected companies from January 2016 to July 2022. Three-quarters of this were attributable to fossil fuels (53 billion USD) and one-quarter to renewable energy (17 billion USD). In the last three to four years, ICBC seems to have increased its fossil fuel-attributable credit to the selected companies, while credit to renewable energy appears to have been relatively stable, potentially even declining.

China has raised their 2030 and 2060 climate goals and financial institutions play a decisive role in whether China can achieve these goals. ICBC’s current investment in renewable energy shows that in spite of their fossil fuel investments, they are in a position to push China to deliver on their pledges if there is sufficient clamor for them to lead China’s pursuit of green and low-carbon energy.