Many financial institutions are continuing to spend billions of dollars on fossil fuel companies despite committing to net zero, according to a new study.

Reclaim Finance, part of a group of NGOs that published the research, says that while some of the world's largest lenders have joined the Glasgow Financial Alliance for Net Zero (GFANZ) they are still pouring money into businesses that heavily produce greenhouse gases.

The report found that since joining the alliance, 56 of the biggest banks in the alliance have provided $270 billion to 102 major fossil fuel expanders.

It also reveals that 58 of the largest members of the Net Zero Asset Managers initiative (NZAM) held at least $847 billion of stocks and bonds in 201 major fossil fuel developers as of September last year.

Reclaim Finance said that only a handful of financial institutions have actually adopted policies that meaningfully restrict finance to new fossil fuel projects since joining the GFANZ.

“The science is very clear: we need to stop developing new coal, oil and gas projects as soon as possible if we want to meet our climate goals and avoid a worst-case scenario,” said Lucie Pinson, executive director and founder of Reclaim Finance. “Yet, it is business as usual for most banks and investors who continue to support fossil fuel developers without any restrictions, despite their high-profile commitments to carbon neutrality.”

The figures come after the Financial Conduct Authority (FCA) proposed a set of new rules as part of plans to “clamp down” on greenwashing.

The UK regulator said that the new measures would include investment product sustainability labels and restrictions on how terms like ESG, green, or sustainable can be used.

The move followed the Advertising Standards Authority's (ASA) banning of two HSBC bus-stop posters which referred to the bank's investment in helping its clients reach net-zero and its tree-planting initiative.

The bank later announced it had plans to stop funding new oil and gas fields.

Overall the research found that 229 of the world's largest fossil fuel developers received finance from the 161 GFANZ members covered in the study. Reclaim Finance says that this money will help support these companies in developing new coal power plants, mines, ports, and other infrastructure, alongside new oil and gas fields and pipelines.

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