| By Alastair Marsh Wall Street has seen a significant decline in its financing of fossil fuel projects, as markets prove more powerful than net zero goals in shaping loan and bond portfolios. In all, financing provided to oil, gas and coal projects by Wall Street's top six banks fell 25% to $73 billion this year through Aug. 1 from the same period in 2024, according to data compiled by Bloomberg. The biggest decline was at Morgan Stanley, where fossil-fuel financing dropped 54%. The smallest was at JPMorgan Chase & Co, which saw a roughly 7% decline. The development coincides with what JPMorgan analysts say looks to be the first decline in global upstream oil and gas development spending since 2020. It also follows a period during which Wall Street's top lenders all made headlines by walking away from the Net-Zero Banking Alliance after the reelection of Donald Trump to the White House. Trump's anti-climate and pro-fossil fuel policies have piled pressure on US banks and asset managers to publicly toe the line of the White House's energy agenda. Yet behind the scenes, the data paint a more nuanced picture.  Oil drill pipes near a pump jack at an oilfield in Azerbaijan. Photographer: Andrey Rudakov/Bloomberg Wells Fargo & Co., which has gone further than its peers in walking back net zero goals, provided $19.1 billion in fossil fuel loans and bonds in the first seven months of the year. That's more than any other bank, but still down 17% from the same period last year, the Bloomberg data show. Spokespeople for Wells Fargo, JPMorgan and Morgan Stanley all declined to comment. Miquel Kishimoto Guardiola, an analyst at BloombergNEF, says the composition of banks' lending books — especially if there's been a reallocation of capital from fossil fuels to clean activities — is a better measure of whether they're having a "meaningful energy transition impact" than their public net zero commitments. That's amid evidence that even banks leaving NZBA appear to be on a steady trajectory of decarbonization, according to BNEF. That also applies to the latest defectors from the alliance, the UK's HSBC Holdings Plc and Barclays Plc. The carbon footprint of banks' financing activities is hundreds of times bigger than the emissions they generate directly from using offices or putting their employees on planes. That's why climate activists and investors monitor how much capital banks allocate to high-carbon sectors such as oil, cement and coal. To align their activities with the goal of limiting global warming to 1.5C, banks should allocate $4 to green projects for every $1 they invest in brown activities, according to BloombergNEF. BNEF's latest analysis shows that the wider industry — on average — still has a long way to go before reaching that level. Last month, the Science Based Targets initiative — the leading global standard setter for corporate climate targets — published its guidelines for how banks can follow credible paths to net zero. The move rekindled an old debate on whether banks can be expected to achieve net zero if the economies in which they operate are on a different trajectory. Lisa Sachs, the head of Columbia University's Center on Sustainable Investment, criticized SBTi's approach, accusing it of "perpetuating a fallacy on which so many financial sector initiatives are based: that financial institutions can or will drive transitions." Banks exist to "maximize returns," she said. "Not to influence the direction of the economy." An SBTi spokesperson said banks play a "catalytic role" in the economy, adding that it's "more important now than ever that financial institutions leverage that role" to cut emissions and support climate solutions. SBTi's guidelines stipulate that financial institutions should stop financing companies engaged in new oil and gas production by 2030 at the latest. That's more lenient than an earlier version, which called on banks to cease such financing immediately. With Wall Street having opted out of the Net-Zero Banking Alliance, there's perhaps little reason to expect US banks to embrace SBTi's new guidelines. At the same time, if the latest data on fossil-fuel financing is any guide, US banks may now be reducing emissions in response to the forces of capitalism. For more news on financing and the energy transition, please subscribe. A database back from the dead | By Lauren Rosenthal A climate nonprofit is planning to revive a key federal database tracking billion-dollar weather disasters that the Trump administration formally stopped updating in May. The database — which was produced by the National Oceanic and Atmospheric Administration — is set to return this fall as a product of Climate Central. The organization has hired Adam Smith, the former NOAA climatologist who led the disaster tracker for more than a decade, to continue tallying the growing number of storms, droughts and wildfires that cause at least $1 billion in damage.  A worker helps with clean up of the Palisades Fire in Los Angeles. Photographer: Roger Kisby/Bloomberg In an interview with Bloomberg Green, Smith said he left NOAA voluntarily in April after facing pressure to stop work on the database. The Trump administration has waged a broad assault on climate science in recent months, attacking mainstream findings, disabling the federal Climate.gov website and proposing to eliminate most of NOAA's research division. The billion-dollar disaster tool – which has been retired but is still publicly accessible online — captured the financial toll wrought by increasingly intense weather events. Rather than just a static dataset or periodic report, like those published by insurance businesses, the NOAA tool provided an interactive way to parse disaster losses by state, year and weather threat, Smith said. "You could just slice and dice the data in different ways depending on what question you're trying to answer," Smith said in an interview. "I've had many people try to ask me for guidance about how to recreate this, and I'm telling all these people, 'Hey, we're doing it.'"
NOAA did not immediately respond to a request for comment. Looking ahead, Smith said he hopes to compile and analyze data on disasters with far smaller price tags down to the $100 million threshold. These include severe hail storms in the US Midwest and Mountain West, which are a growing concern for the insurance sector. While NOAA typically reported wildfire damages seasonally across an entire region, Climate Central will also work to calculate losses from individual blazes, something Smith said would make the data "more transparent and more granular." The nonprofit has published studies and tools that demonstrate how human-caused climate change is influencing both daily temperatures and extreme weather events, such as hurricanes. Smith said "economic attribution," which would attempt to measure climate change-driven losses for specific disasters, is "something worth exploring." Read the full story.
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