Only 7% of global energy financing goes to green projects, data shows
Recently, it was found that only a small percentage of global financing is being put towards green energy projects, with just 7% going to such projects. Ward Warmerdam, a Senior Financial Researcher at Profundo, explained that while funding for renewable energy is increasing, financing for fossil fuel companies is also on the rise. According to Warmerdam's research, funding for fossil fuels should be decreasing, while funding for renewable energy should be increasing to achieve the net zero target.
Warmerdam has shared his research findings with banks, but they have given little response, stating bank confidentiality as the reason for not commenting on the data. Warmerdam believes that the real issue is that banks do not want to lose their fossil fuel company clients, so they are not divesting from fossil fuels. Instead, banks are helping these companies transition to renewable energy sources and implement net-zero plans by offering services such as green bonds and loans.
Warmerdam believes that this is an inadequate excuse and that banks should invest in renewable energy projects and stop financing fossil fuels. With the International Energy Agency's announcement that further exploration of fossil fuels is unnecessary to meet climate targets, it is crucial to shift to sustainable energy sources, and banks must play a more active role in making this shift happen.
To know more, watch the full interview.