Study: UK banks emerge as Europe’s biggest coal financiers – edie

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The UK’s financial sector is at odds with its European peers. While the continent’s banks retreat from coal financing, British institutions are stepping up their support for the fossil fuel industry

New analysis reveals a significant divergence in lending practices. This raises pointed questions for London’s role in the global energy transition and the credibility of its climate pledges

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That is according to a new analysis from environmental non-profit Urgewald, which was published this week (30 September). The research analysed 744 commercial banks that provided a collective $467bn inloans and underwriting to companies within the coal value chain

At the 26th Conference of the Parties (COP26), which took place in Glasgow in 2022, 197 countries agreed on the Glasgow Climate Pact. As part of the declaration, countries pledged to phase down “unabated” coal power for the first time

Since then, banks based in COP26’s host country have directed over $8bn, according to Urgewald’s findings

Barclays, for instance, increased its coal financing by 34%, up from around $1.2bn to $1.6bn last year. HSBC more than doubled its financing, which rose from $200m to $414m in the same time frame

Related article: TUC calls for bank windfall tax to cut household energy bills

Comparatively, Germany-headquartered institutions provided $4.9bn in financing, while French banks allocated $3.4bn. Overall, financing from European Union (EU) banks dropped46% between 2022 and 2025, falling from $4.8bn to $2.6bn

“UK banks cannot claim climate leadership while continuing to increase their support for companies operating across the coal value chain,” said Urgewald director Heffa Schücking. “Barclays and HSBC should explain why their financing is moving in the opposite direction to the rest of Europe.”

The global picture

Despite commitments made at COP26, global coal finance has remained broadly flat since the summit, at around $117bn annually

With $289bn allocated over the period, Chinese banks represented the lion’s share of coal financing (62%)

Indonesian banks increased their coal financing by 64% over the period, while South Korean banks also more than doubled their financing

Banks in Taiwan, Malaysia and Thailand, on the other hand, significantly reduced their financing in the four-year period

“Coal financing is not disappearing – but it is concentrating in banks and markets where coal policies are either missing or weak,” added Schücking

In the US, for instance, banks increased coal financing by 23%, from $13.6bn in 2022 to $16.7bn in 2025. They provided almost $70bn overall

Since the signing of the Paris Agreement in 2016, the world’s 65 largest banks have financed $8.7trn in fossil fuel operations. US-based JPMorgan Chase, Bank of America and Wells Fargo are among the biggest financiers

According to Urgewald’s findings, Bank of America’s coal financing rose by 62%, from $1.4bn to $2.3bn in 2025. JPMorgan Chase increased its financing by 45%, from $1.5bn to $2.2bn, while Wells Fargo’s rose by 59%, from $1.2bn to $1.9bn

In 2025 alone, banks directed $906bn to fossil fuel companies globally through their lending and underwriting decisions, an 8% increase from 2024

Financing for fossil fuel expanders also rose significantly in 2025, up 27% year-on-year to $508bn. This included supporting companies expanding oil, gas or coal developments, pipeline and liquefied natural gas (LNG) operations or new downstream fossil fuel projects

The recent increase in fossil financing comes despite the fact that over a third of major banks pulled back on fossil fuel spending in 2025, including notable progress in European firms like BNP Paribas and Groupe BPCE

“This shows there is no inevitability here: sustained public pressure can force change,” said co-author Lucie Pinson, the director and founder of Reclaim Finance. “The challenge now is to maintain and amplify that pressure until ending fossil fuel finance becomes the norm.”

Related article: ECB ‘Funds Fossil Fuels Harming Biodiversity’, Report Claims

Topics

• Climate & nature
• Finance

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