UK and US banks among biggest backers of Russian ‘carbon bomb’ projects

Hundreds of financial institutions funding projects capable of emitting more than a gigaton of carbon dioxide, research finds

Russian oil refineries are receiving huge sums in foreign support (AFP via Getty Images)

British and American banks have been among leading investors in Russian “carbon bomb” projects that emit vast amounts of damaging greenhouse gases, according to a new database.

At least 400 foreign financial institutions have provided billions of pounds of support to Russian firms set to extract fossil fuels for burning, figures show.

Ukrainian campaigners said they must halt their investments to curb funding of both Russia’s war on Ukraine and climate breakdown.

A “carbon bomb” is a coal, oil or fossil gas project large enough to emit more than a gigaton of carbon dioxide. There are 425 of them around the world, according to the Germany-based Leave it in the Ground Initiative (Lingo) campaign group.

More than a third of the world’s carbon bombs are still being prepared and have not yet started extraction, but defusing them is vital for meeting the Paris Agreement temperature target, the organisation says.

The four countries with the biggest number of carbon bombs are China, the United States, Russia and Saudi Arabia.

Russia has 40 carbon bombs, 19 of them operated or developed by companies backed by foreign finance - Gazprom, Novatek, Lukoil, Rosneft oil company and Tatneft.

The database shows the backers provided $130bn (£109bn) of support to the Russian companies – $52bn (£44bn) in investment and $84bn (£71bn) in credit, The Guardian reported.

Financial institutions in the US hold almost half the foreign investment in Russian carbon bomb companies, 154 institutions holding $23.6bn (£20bn).

The largest combination of investment and credit – $10bn (£8.5bn) – was provided by JPMorgan Chase, which other analyses have also identified as a leading funder of fossil fuels.

The UK was third in the list of investing nations, with 32 financial institutions holding $2.5bn (£2.1bn) in investments. HSBC had the largest investment and credit total, at $308m (£281bn).

Financial groups in Japan, Norway, Switzerland and the Netherlands also held significant investments, while Chinese and Italian institutions provided $45bn (£38.2bn) in credit between them.

“Putin’s war is funded through money from fossil fuels and these fossil fuels are causing climate breakdown as we speak,” said Svitlana Romanko, director of the Ukrainian grassroots organisation Razom We Stand, which is calling for an immediate end to all foreign investment in Russian fossil fuel companies and a permanent embargo on Russian oil, gas and coal.

“Investing in Russian carbon bombs is the worst thing you can do today.”

The Lingo researchers said some financial institutions may have reduced their support for the Russian companies since the war started, but that many seemed to have adopted a wait-and-see approach.

The foreign funding is largely for big oil and gas projects in Russia, including in Siberia and the Arctic.

A spokeswoman for HSBC told The Guardian: “HSBC Asset Management has suspended dealings in its Russia-only funds which include the Russian oil and gas companies referenced and [is] no longer investing further in funds whose objectives included investing in Russian securities. In these funds, exposure to Russian equities has generally been reduced or exited.”

The Independent has asked JPMorgan Chase to comment.