{"id":39022,"date":"2026-01-20T09:54:27","date_gmt":"2026-01-20T08:54:27","guid":{"rendered":"https:\/\/reclaimfinance.org\/site\/?p=39022"},"modified":"2026-01-29T16:48:14","modified_gmt":"2026-01-29T15:48:14","slug":"2025-banks-energy-financing-ratios-the-good-the-bad-and-how-to-move-forward","status":"publish","type":"post","link":"https:\/\/reclaimfinance.org\/site\/en\/2026\/01\/20\/2025-banks-energy-financing-ratios-the-good-the-bad-and-how-to-move-forward\/","title":{"rendered":"2025 banks\u2019 energy financing ratios: the good, the bad and how to move forward"},"content":{"rendered":"

BNP Paribas and JPMorgan Chase were the only global banks willing to publish an Energy Supply Financing Ratio (ESFR) in 2024. By the end of 2025, four more banks had followed suit. The ESFR measures how much a bank finances sustainable power supply, such as renewable electricity from wind and solar (1), relative to fossil fuels. This provides insight into the bank’s climate action. Today, six banks either publish this indicator, its methodology, or have committed to achieving one in the medium term. Despite their different approaches, some common features are emerging, as are loopholes that could affect their credibility. A regional divide is also emerging, with European and North American banks adopting notably different approaches. This analysis examines these differences and highlights where the methodologies succeed, fall short, or distort the reality.<\/p>\n<\/div>

To avoid the worst effects of climate change, two major shifts in global annual energy investment are required: a rapid decrease in fossil fuel investment and a rapid increase in the supply of sustainable energy, primarily in the form of power. If the world is to achieve carbon neutrality by 2050 and limit global warming to 1.5\u00b0C, as described in the International Energy Agency\u2019s (IAE) Net Zero Emissions (NZE) scenario, banks should allocate six dollars to sustainable energy for every dollar they allocate to fossil fuels by 2030 (a 6:1 ESFR) (2). Yet our research<\/span><\/a><\/span> shows that, between 2021 and 2024, the 65 largest banks worldwide allocated only 42 cents to sustainable power supply for every dollar directed to fossil fuels (an ESFR of 0.42:1). Banks therefore have a long way to go.<\/p>\n<\/div>

<\/div><\/div><\/span>

How the Energy Supply Financing Ratio became a benchmark<\/h2><\/span>
<\/div><\/div><\/div>

The ESFR has gained momentum in recent years. Institutions such as Bloomberg New Energy Finance (BNEF), the European Banking Authority (EBA), the Science Based Targets Initiative (SBTi), the World Resources Institute (WRI) and the Institut Louis Bachelier (ILB), have increasingly studied the metric as an indicator of banks\u2019 climate action (3). Shareholder pressure has significantly accelerated this trend. In 2024 and 2025, the New York City Comptroller (NYCC), which oversees the city\u2019s public pension funds, and SHARE filed resolutions urging major North American banks to publish a \u201cclean energy supply ratio\u201d, without prescribing a methodology. These negotiations led banks including JPMorgan Chase, Citi, Scotiabank and RBC to disclose or commit to disclose their ratios. As the NYCC has noted, the metric is poised to become a standard disclosure and a key tool for investors to judge whether banks are shifting capital at a pace consistent with global climate goals (4).<\/p>\n<\/div>

<\/div><\/div><\/span>

Diverging approaches on each side of the Atlantic<\/h2><\/span>
<\/div><\/div><\/div>

BNP Paribas and Cr\u00e9dit Agricole are the only major global banks to publish their current ratio and commit to 9:1 targets by 2030 and 2028, respectively (5). Groupe Banque Populaire Caisse d\u2019\u00c9pargne (BPCE) also discloses its current ratio but has not set a medium-term target (6). However, all three approaches rely on narrow definitions of fossil fuel activity, incomplete coverage of financing instruments, and opaque methodologies (see Table 1).<\/b><\/p>\n

The three French banks restrict the fossil fuel component of the ratio to certain segments of the oil and gas value chain, leaving significant activities outside the scope of calculation. Cr\u00e9dit Agricole only includes extraction, BNP Paribas covers extraction, production, and refining, and Groupe BPCE covers extraction and refining. Major sectors such as liquefied natural gas (LNG) and gas-fired power generation are excluded altogether. In addition, the ratios are based solely on credit exposure, omitting financing provided through bond and equity underwriting. Between 2021 and 2024, these activities accounted for 36% of BNP Paribas’s fossil fuel financing, 27% of Cr\u00e9dit Agricole’s, and 23% of Groupe BPCE’s (7), meaning their ratios significantly understate their level of support for fossil fuels. Furthermore, neither bank publishes its detailed ratio methodology, making their calculations opaque, particularly with regard to which technologies qualify as \u201cgreen\u201d in the case of Cr\u00e9dit Agricole.<\/p>\n

Across the Atlantic, the picture looks different. US banks Citi and JPMorgan Chase do not set medium-term ratio targets, but they do disclose their current ratios along with detailed methodologies (8). Canada\u2019s RBC publishes its methodology but not its current ratio (9). The strengths of these methodologies include covering larger portions of the fossil fuel value chain (although Citi does not explicitly state whether this includes LNG) and incorporating both lending and bond underwriting, which provides a more comprehensive overview of fossil fuel financing (see Table 1).<\/strong><\/p>\n

However, the integrity of these ratios is weakened by the inclusion of fossil-related technologies on the \u201clow-carbon\u201d side, or the inclusion of sectors unrelated to energy supply. Citi and JPMorgan Chase both allow fossil-based hydrogen and certain carbon capture and storage projects on the \u201clow-carbon\u201d side (10). JPMorgan Chase even includes fossil-fired power with carbon capture. RBC’s inclusion of \u201cdecarbonisation finance\u201d is also problematic because it encompasses activities such as cement manufacturing and other industrial processes that are not related to energy supply. JPMorgan Chase also includes public electric vehicle (EV) chargers on the \u201clow-carbon\u201d side, while fossil fuel counterparts, such as filling stations, are not covered on \u201chigh-carbon\u201d (11). These methodological choices inflate the sustainable portion of the ratio and risk overstating progress toward the energy transition.<\/p>\n

While some progress was made in 2025 regarding the adoption of ESFR by banks, much more is needed. A global, rapid and fair transition to a sustainable energy system is vital, and banks should support this urgent shift instead of perpetuating the dependence on fossil fuels. To do so, banks must disclose their current ESFR and set a dedicated target compatible with a net-zero trajectory for 2030. This requires reducing financing for fossil fuels, with the immediate ending of all support for their expansion, while accelerating financing for sustainable power supply. The ESFR methodology should be transparent and robust, covering all fossil fuel financing products and services across the entire value chain, and being based on truly sustainable technologies.<\/strong><\/p>\n<\/div>

<\/div><\/div><\/span>

Table 1. Summary of banks’ ESFR strengths and weaknesses<\/h2><\/span>
<\/div><\/div><\/div>\n
\n\n\n\n\n\n\n\n\n\n\n
Bank<\/th>\nStrengths<\/th>\nWeaknesses<\/th>\n<\/tr>\n<\/thead>\n
BNP Paribas<\/td>\n\n
    \n
  • Target set for 2030<\/span><\/li>\n
  • Publishes current ratio<\/li>\n<\/ul>\n<\/td>\n
\n
    \n
  • Covers only loans and not bond or share issuances<\/li>\n
  • Restricted to extraction, production and refining for the oil & gas value chain, thus leaving sectors such as LNG and gas power outside the scope<\/li>\n
  • No public methodology document<\/li>\n
  • Based on credit exposure rather than financial flows, meaning it does not effectively reflect new financing commitments<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Cr\u00e9dit Agricole<\/td>\n\n
    \n
  • Target set for 2028<\/li>\n
  • Publishes current ratio<\/li>\n<\/ul>\n<\/td>\n
\n
    \n
  • Covers only loans and not bond or share issuances<\/li>\n
  • Covers only fossil fuels extraction, thus leaving sectors such as LNG and gas power outside the scope<\/li>\n
  • No public methodology document<\/li>\n
  • Based on credit exposure rather than financial flows, meaning it does not effectively reflect new financing commitments<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Citi<\/td>\n\n
    \n
  • Publishes current ratio and detailed methodology<\/li>\n
  • Covers not only loans but also bond issuances<\/li>\n
  • Measures financial flows rather than credit exposure, making it a more accurate reflection of new financing commitments<\/li>\n<\/ul>\n<\/td>\n
\n
    \n
  • No medium-term ratio target<\/li>\n
  • \u201cLow carbon\u201d includes technologies related to fossil fuels (CCUS)<\/li>\n
  • LNG is not explicitly included in the fossil fuel scope<\/li>\n
  • Binary allocation (100%) to low-carbon or fossil fuels of financing, based on company sector classification (exception for utilities)<\/li>\n
  • An alternative ratio without revolving credits (RCF) is also published, which risks downplaying the importance of RCFs in financing the fossil fuel industry<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Groupe BPCE<\/td>\n\n
    \n
  • Publishes current ratio<\/li>\n<\/ul>\n<\/td>\n
\n
    \n
  • No medium-term ratio<\/li>\n
  • No public methodology document<\/li>\n
  • Covers only loans and not bond or share issuances<\/li>\n
  • Restricted to extraction and refining for the oil & gas value chain, thus leaving sectors such as LNG and gas power outside the scope<\/li>\n
  • Based on credit exposure rather than financial flows, meaning it does not effectively reflect new financing commitments<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
JPMorgan Chase<\/td>\n\n
    \n
  • Publishes current ratio and detailed methodology<\/li>\n
  • Covers not only loans but also bond issuances<\/li>\n
  • Covers the entire oil & gas value chain<\/li>\n
  • Measures financial flows rather than credit exposure, making it a more accurate reflection of new financing commitments<\/li>\n<\/ul>\n<\/td>\n
\n
    \n
  • No medium-term ratio target<\/li>\n
  • \u201cLow-carbon\u201d includes technologies related to fossil fuels (fossil power plants with CCUS, fossil-based hydrogen)<\/li>\n
  • Covers energy demand sectors such as EV charging on the \u201clow-carbon\u201d side, while fossil counterparts (such as filling stations) are not covered on the \u201chigh-carbon\u201d side<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Royal Bank of Canada<\/td>\n\n
    \n
  • Publishes detailed methodology<\/li>\n
  • Covers not only loans but also bond issuances<\/li>\n
  • Covers the entire oil & gas value chain<\/li>\n<\/ul>\n<\/td>\n
\n