Why Financial Giants Should Stop Bankrolling Climate Catastrophe

By Hussein Adeleye

Each year, the world finds itself trapped in an increasingly vicious cycle of climate crisis and economic decisions that further deepen the planet’s vulnerability. In 2023, the same year that catastrophic climate events ranging from floods in Zambia and Nigeria to the devastating impact of Cyclone Freddy in Mozambique displaced millions and worsened global hunger, financial institutions continued to funnel billions into fossil fuels, an industry directly exacerbating the climate crisis.

The catastrophic climate events of 2022 starkly highlighted the escalating climate crisis. In Pakistan, unprecedented monsoon floods submerged a third of the nation, resulting in over 1,700 fatalities and displacing approximately 33 million individuals. Concurrently, East Africa faced its most severe drought in four decades, thrusting more than 20 million people in Kenya, Ethiopia, and Somalia into acute food crisis. Europe was not spared, enduring record-breaking heatwaves with temperatures exceeding 40°C, which ignited wildfires that ravaged over 600,000 hectares and rendered thousands homeless. Yet, in the face of such clear warnings, financial institutions chose to sustain and even increase their investments in fossil fuel the next year (2023).

The annual Banking on Climate Chaos: Fossil Fuel Finance report 2024 exposed the scale of this reckless financing, revealing that the world’s 60 largest banks funnelled a staggering $705 billion into fossil fuel financing in 2023 alone. This brought total fossil fuel investments since the Paris Agreement to an alarming $6.9 trillion, highlighting the widening gulf between the rhetoric of global climate action and the reality of financial investments. Leading the pack, JPMorgan Chase increased its commitment to fossil fuels from $38.7 billion in 2022 to $40.8 billion in 2023 and an overall total of $ 430.9 billion since 2016, solidifying its role as the top financier of climate destruction.

The true cost of these investments is measured not just in dollars but in human suffering. Reports on the Worst Climate Disasters of 2023 by the World Food Programme USA, painted a grim picture of a world teetering on the edge of an unprecedented humanitarian crisis. Floods, droughts, cyclones, and wildfires displaced millions and devastated entire communities. The toll was not just in lives lost, but in agricultural devastation that crippled food systems.

In Zambia, for instance, over 400,000 people needed urgent humanitarian assistance after severe flooding, while in Mozambique, Cyclone Freddy left entire communities submerged and in dire need of aid. The ripple effects were felt far beyond the immediate damage, as millions were driven into hunger and displacement.

Nigeria, too, faced relentless climate-induced devastation. Between 2022 and 2024, a series of unprecedented floods exposed the country’s growing climate vulnerability. The Nigeria Flood Response Report 2022 by UNICEF reported that 2022 had one of the worst flooding of the decade which affected 4.4 million people, including 2.6 million children, and displaced 2.4 million individuals. The aftermath saw a surge in cholera cases, particularly in Cross River, Bayelsa, and Niger states, highlighting the severe public health risks associated with extreme weather events.

The crisis persisted in 2023, with floods affecting over 33,000 people across ten states, displacing more than 7,300 individuals as reported by the National Emergency Management Agency (NEMA). Entire communities suffered as 1,679 houses were destroyed and 866 hectares of farmland submerged, exacerbating food crisis and economic instability.

By 2024, the situation had worsened, with catastrophic floods impacting 33 out of 36 states as reported in the October 23 2024 Floods – Situation Report No. 4 by the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA). This resulted in over 300 fatalities and impacted approximately 1.2 million people with Borno, Bauchi, and Kogi states among the hardest-hit. Also, the collapse of the Alau Dam in Borno State alone led to 150 deaths and the displacement of 419,000 people. The flooding submerged approximately 70% of Maiduguri, while stagnant floodwaters triggered a nationwide cholera outbreak, claiming over 350 lives.

Scientific analyses have also linked the severity of the 2024 floods to climate change. The World Weather Attribution network reported that human-induced climate change intensified the rainy season across the Niger and Lake Chad basins by 5-20%, contributing significantly to the extreme flooding experienced in Nigeria and neighbouring countries

While climate change devastates the entire country, Nigeria’s Niger Delta remains the epicentre of environmental injustice. For decades, oil spills, gas flaring, and corporate impunity have poisoned the land, water, and air. Communities have lost their livelihoods to pollution, suffered severe health crises, and endured unchecked environmental degradation with little accountability from fossil fuel companies, their funders or the government.

In Ogoniland, the situation is particularly dire. The government is pushing to resume oil extraction without fully implementing the United Nations Environment Programme (UNEP) recommendations for environmental remediation. This disregard for cleanup before renewed drilling exposes a broader pattern of systemic neglect and exploitation.

Beyond Ogoniland, places like Bonny Island continue to suffer the consequences of unchecked fossil fuel extraction. Home to one of Nigeria’s largest liquefied natural gas (NLNG) plants, Bonny Island remains plagued by pollution. Gas flaring chokes the air, damaging crops and causing widespread respiratory illnesses. Soot covers entire communities, turning clean air into a luxury in a region that fuels the national economy. Corporate promises of sustainability ring hollow as government pledges for a cleaner Niger Delta fail to materialise. Without urgent action to enforce environmental regulations, accelerate remediation, and transition toward clean energy, the region’s suffering will only deepen mirroring the plight of countless oil and gas host communities worldwide.

As the climate crisis escalates, the unethical decision of fossil fuel financing becomes impossible to ignore. How can financial giants like JPMorgan Chase, Mizuho, Mitsubishi UFJ Financial Group (MUFG), Bank of America, Citigroup and others justify increasing investments in an industry driving the destruction of vulnerable communities, particularly in the Global South?

Despite undeniable evidence of climate change’s catastrophic impacts, financial institutions continue to prioritize short-term profits over long-term survival. If the trillions invested in fossil fuel expansion were redirected toward renewable energy, research, and clean technology, the global landscape could begin to shift. Instead of exacerbating climate disasters, financial institutions could become part of the solution helping to mitigate the crises that threaten millions globally.

The mounting climate crisis and unchecked fossil fuel investments raise fundamental questions: Why aren’t investors prioritising climate solutions? Why does the finance industry continue to back the industries accelerating global destruction? The answer lies in the systemic failure of financial institutions to align their actions with the climate commitments they publicly endorse.

Despite Norway’s reputation as a global climate leader, Norges Bank Investment Management (NBIM) which oversees the country’s $1.5 trillion Government Pension Fund Global (GPFG) remains deeply entrenched in fossil fuel investments. Among its key holdings is Shell, a company with a well-documented history of environmental devastation in Nigeria’s Niger Delta. For decades, oil spills, gas flaring, and corporate negligence have poisoned water sources, destroyed livelihood, and displaced entire communities, leaving a toxic legacy of pollution and poverty. Only a few days ago, Shell Nigeria confirmed an overflow of a saver pit during flushing operations at Ogale, its manifold near Port Harcourt.

The events of 2022 and 2023 made one thing clear: the climate crisis is no longer a distant threat: it is an immediate catastrophe driving millions into hunger, displacement, and death. The financial sector must acknowledge its role in both the cause and the cure. Redirecting investments toward renewable energy, alongside stronger policies to curb fossil fuel expansion, is essential to preventing worsening climate disasters.

The question is no longer whether the financial sector should change; it is whether it will. As global temperatures rise, as millions face hunger, and as communities are displaced, the moral imperative is clear: Stop financing the destruction and invest in a resilient, sustainable future.

• Hussein Adeleye is the Communications officer of the Africa Network for Environment and Economic Justice (ANEEJ)