A report highlights key details on UK banks and their ties to fossil fuels. It draws from a study by a consumer group that looked at banking choices and their impact on the environment. Last year, some of the largest banks in Britain poured billions of pounds into oil and gas projects. This cash helped fuel companies that harm the climate. Yet, just two banks stood out for strong ethical practices.

The study gave praise to top banks that avoid such risks. The Co-operative Bank and Triodos Bank earned the label “Eco Provider.” This means they have zero links to fossil fuels in their loans and operations. They also follow strict rules on ethics, like fair treatment of workers and support for green causes. Triodos goes further. It shares its full list of loans with the public. Customers can check exactly where their deposits go, from solar farms to local shops. This openness builds trust and helps people pick banks that match their values.

In contrast, the report flags big problems with seven major banks. These include Barclays, Chase, Danske Bank, HSBC, Lloyds, NatWest, and Santander. Each one put a lot of money into fossil fuel work. This funding backs drilling and pipelines that release gases linked to global warming. Such investments clash with goals to cut carbon emissions.

Take Chase from JP Morgan as an example. It topped the list worldwide for fossil fuel support. In 2024, it pledged $53.5 billion, or about £40 billion, to oil and gas firms. This amount alone could fund many clean projects instead. Barclays and HSBC also ramped up their support last year. They gave more cash to fossil fuel sites, even after they promised to shift toward clean energy. Public pledges often sound good, but actions tell a different story.

Why does this matter? Banks shape the world’s energy path through their choices. Fossil fuels drive climate change, with rising seas and wild weather. Consumers want banks that help fight this. But when big players keep funding dirty energy, it muddies the waters. People struggle to find true green options. The study shows a gap between what banks say and do. It urges shoppers to ask questions, like how a bank screens its loans. This push for change could lead to better choices in the UK market.

Recent analysis by consumer group Which? has exposed a troubling paradox in the UK banking sector: while public commitments to net-zero targets proliferate, fossil fuel financing is not only continuing but accelerating. This comprehensive examination reveals the gap between rhetoric and reality in sustainable banking, with implications extending far beyond Britain’s shores to financial hubs like Singapore.

The Scale of the Problem

Global Context

The Banking on Climate Chaos report documented that the world’s top 65 lenders committed a staggering $869 billion (£648 billion) to fossil fuel financing in 2024. This represents a reversal of the declining trend observed since 2021, signaling a potential watershed moment in climate finance. The increase suggests that despite growing climate awareness and regulatory pressure, major financial institutions are doubling down on carbon-intensive investments.

UK Banking Sector Performance

Which?’s analysis, conducted in collaboration with NGOs Reclaim Finance and Global Canopy, examined 16 current account providers operating in the UK market. The findings paint a stark picture of divergence within the sector.

The Seven Major Contributors

Seven UK banks were identified as significant fossil fuel financiers, each with distinct patterns of problematic investment:

JP Morgan Chase: The Global Leader in Fossil Fuel Finance

Chase’s position as the world’s largest fossil fuel financier is particularly concerning. With $53.5 billion committed to fossil fuel companies in 2024 alone, the bank’s policies actively enable companies to expand coal, oil, and gas operations. More troublingly, the analysis found that Chase has weakened its environmental safeguards by replacing strong deforestation requirements with less stringent alternatives.

The bank’s defense—that it aims to commit $1 trillion to climate initiatives by 2030—highlights a fundamental contradiction: simultaneously financing both renewable energy and fossil fuel expansion. This approach undermines the urgency of climate action and raises questions about whether such institutions can credibly claim climate leadership.

Santander: Supporting New Fossil Fuel Development

Santander’s policies explicitly allow the bank to support customers developing new fossil fuel projects, a stance increasingly at odds with climate science. The Intergovernmental Panel on Climate Change has made clear that limiting global warming requires no new fossil fuel development. Additionally, Santander’s lack of key protections for palm oil, soil, beef, and leather supply chains suggests broader environmental governance gaps.

The bank’s response—that it supports companies “in their transition to a low-carbon economy”—rings hollow when juxtaposed against its continued financing of new fossil fuel infrastructure.

Barclays and HSBC: The Commitment-Reality Gap

These two institutions exemplify the credibility crisis facing major banks. Both made high-profile clean energy commitments and net-zero pledges, yet both significantly increased their fossil fuel financing in 2024. This pattern suggests that public commitments may serve primarily as reputational management tools rather than binding operational constraints.

Barclays’ justification—that economies still depend on conventional energy during the transition—acknowledges reality but sidesteps the question of whether financing should prioritize transition away from fossil fuels rather than maintaining the status quo.

Lloyds and NatWest: The Relative Moderates

While still contributing billions to fossil fuels, these banks demonstrated marginally better performance than their peers. They showed greater transparency in reporting and implemented more solid requirements for the companies they finance. This suggests that even within the problematic mainstream banking sector, degrees of responsibility exist and improvement is possible.

The Two Ethical Leaders

The Co-operative Bank and Triodos Bank

These institutions stand in sharp contrast to their larger competitors. Both achieved “Eco Provider” endorsement by maintaining zero exposure to fossil fuels in their banking activities. Their success demonstrates that viable business models exist for banks that prioritize environmental sustainability.

Triodos Bank’s decision to publish its entire loan portfolio represents a revolutionary approach to banking transparency. This level of disclosure empowers customers to make informed decisions and holds the institution accountable in ways that standard ESG reporting cannot match.

Deep Analysis: Why This Matters

The Power of Banking Capital

Banks serve as the circulatory system of the global economy. Every loan, every line of credit, every bond underwriting decision shapes which industries grow and which contract. When major banks commit hundreds of billions to fossil fuels, they’re not merely serving existing demand—they’re actively enabling expansion that climate science indicates must cease.

The Accountability Vacuum

Sam Richardson of Which? Money identified a critical problem: “A lack of accountability and transparency in the banking sector can make it hard to understand where customers’ money is really going.” This information asymmetry undermines consumer choice and democratic accountability. Most customers have no way of knowing that their deposits and fees may fund Arctic drilling or coal mine expansion.

The Greenwashing Risk

The gap between public commitments and actual financing patterns represents a sophisticated form of greenwashing. When banks simultaneously pledge net-zero targets and increase fossil fuel financing, they create confusion that benefits no one except the institutions themselves. This erodes trust in corporate climate commitments generally and makes it harder for genuinely sustainable businesses to differentiate themselves.

Singapore Impact and Implications

Singapore’s Position as a Financial Hub

Singapore operates as Asia’s premier financial center and a crucial node in global capital flows. The city-state’s banking sector maintains deep interconnections with UK banks through correspondent banking relationships, shared investments, and coordinated international lending.

Direct Connections:

• HSBC, Barclays, and Standard Chartered all maintain significant Singapore operations
• UK-based banks often use Singapore as a base for Asia-Pacific fossil fuel financing
• Singapore’s own banks (DBS, OCBC, UOB) frequently co-finance large projects with UK institutions

Regional Fossil Fuel Exposure

Southeast Asia represents one of the world’s most active regions for fossil fuel development, with major projects in:

• Indonesian coal mining and coal-fired power plants
• Malaysian oil and gas fields
• Vietnam’s expanding coal power sector
• Thailand’s gas infrastructure
• Regional LNG terminals and pipelines

UK banks’ policies toward fossil fuel financing directly affect these projects. When Chase, HSBC, or Barclays underwrites Southeast Asian fossil fuel projects, they shape Singapore’s environmental and economic landscape.

Singapore’s Own Climate Commitments

Singapore has pledged to achieve net-zero emissions by 2050 and updated its Nationally Determined Contribution under the Paris Agreement. The city-state faces particular challenges:

• High population density limits renewable energy potential
• As a small nation, Singapore imports most energy needs
• Regional power grid integration depends on neighbors’ energy choices
• The financial sector’s indirect emissions dwarf its direct emissions

When UK banks finance fossil fuel expansion in Southeast Asia, they complicate Singapore’s transition pathway and potentially lock the region into carbon-intensive infrastructure for decades.

Financial Sector Implications

Regulatory Convergence: The Monetary Authority of Singapore (MAS) has introduced green finance frameworks and expects financial institutions to manage climate risks. UK banks operating in Singapore face dual regulatory pressures, but inconsistent enforcement between jurisdictions creates arbitrage opportunities where banks might undertake in Singapore what faces scrutiny in the UK.

Reputation Risks: Singapore positions itself as a sustainable finance hub. The presence of major fossil fuel financiers could undermine this positioning, particularly as younger, environmentally conscious professionals increasingly influence financial sector employment and investment decisions.

Competitive Dynamics: If Singapore-based or regional banks adopt stricter fossil fuel policies than UK competitors, they may lose market share in the short term but gain long-term advantages as climate risks materialize and regulations tighten. Conversely, if UK banks’ fossil fuel exposure creates financial losses, Singapore’s banking system faces contagion risks.

Economic Transition Challenges

Southeast Asia’s economic development trajectory heavily influences global emissions. The region contains some of the world’s fastest-growing economies, with expanding middle classes driving energy demand. UK banks’ financing decisions help determine whether this growth follows carbon-intensive or cleaner pathways.

Infrastructure Lock-in: Fossil fuel infrastructure typically operates for 30-50 years. UK bank financing approved in 2024-2025 will shape regional emissions through 2070, well beyond global net-zero targets. Singapore, as a regional hub, will experience the economic and environmental consequences of these decisions.

Stranded Asset Risks: As climate policy tightens and renewable energy becomes more competitive, fossil fuel assets risk becoming stranded—financially worthless before their technical lifespan ends. UK banks with heavy Southeast Asian fossil fuel exposure could face significant losses, potentially destabilizing the interconnected Singapore financial system.

Opportunities for Singapore

Leadership in Sustainable Finance: Singapore could differentiate itself by implementing stricter green finance standards than UK competitors, attracting institutions and capital seeking genuine sustainability. The contrast between Co-operative Bank/Triodos and major UK banks demonstrates market demand for ethical banking.

Regional Energy Transition Financing: Rather than financing fossil fuel expansion, Singapore-based institutions could focus on transition finance—helping existing fossil fuel companies and regions shift to cleaner alternatives. This approach acknowledges economic realities while aligning with climate goals.

Transparency Standards: Following Triodos Bank’s example, Singapore could require or incentivize financial institutions to disclose their loan portfolios, enabling better-informed capital allocation and consumer choice.

Policy Recommendations

For UK Regulators

1. Mandatory Disclosure: Require all banks to publish detailed fossil fuel financing data, following Triodos’ portfolio transparency model
2. Alignment Testing: Audit banks’ net-zero commitments against actual financing patterns, with penalties for misalignment
3. Progressive Restrictions: Implement declining caps on fossil fuel financing, coordinated with climate targets
4. Greenwashing Enforcement: Strengthen regulations against misleading environmental claims in financial services

For Singapore Authorities

1. Cross-Border Coordination: Work with UK regulators to close loopholes that allow banks to undertake in Asia what faces scrutiny in Europe
2. Enhanced MAS Guidelines: Strengthen climate risk management expectations for foreign banks operating in Singapore
3. Regional Leadership: Convene ASEAN financial regulators to establish common sustainable finance standards
4. Transition Finance Frameworks: Create clear taxonomies distinguishing genuine transition activities from fossil fuel expansion

For Consumers and Investors

1. Banking Choice: Consider shifting deposits to institutions with strong environmental credentials like Co-operative Bank or Triodos
2. Engagement: Use shareholder rights to pressure banks on fossil fuel policies
3. Transparency Demands: Ask banks to disclose their full fossil fuel exposure and expansion financing
4. Support Regulation: Advocate for stronger government oversight of sustainable finance claims

The Path Forward

The Which? analysis reveals that voluntary commitments have failed to align banking practice with climate necessity. Major UK banks continue increasing fossil fuel financing despite public net-zero pledges, creating a credibility crisis that undermines the entire sustainable finance movement.

For Singapore, the implications extend beyond environmental concerns to fundamental questions about financial stability, regional economic development, and the city-state’s positioning in global capital markets. As climate risks materialize and regulations inevitably tighten, today’s financing decisions will determine which institutions thrive and which face existential challenges.

The existence of genuinely sustainable alternatives like Co-operative Bank and Triodos proves that ethical banking is viable. The question is whether market forces, regulatory pressure, or customer demand will compel mainstream banks to follow—and whether this shift will occur rapidly enough to align financial flows with climate imperatives.

The coming years will test whether the financial sector can transform itself or whether more dramatic interventions will prove necessary. For Singapore, caught between its role as a global financial hub and its commitments to sustainability, the stakes could not be higher.

Conclusion

The gap between banking sector rhetoric and reality on climate finance represents more than hypocrisy—it threatens to undermine the global transition to sustainable energy. UK banks’ continued and increasing fossil fuel financing, despite public commitments to the contrary, demonstrates that voluntary approaches have reached their limits.

For Singapore, these findings carry special significance. As a major financial center deeply interconnected with UK banks and situated in a region undergoing rapid energy development, Singapore’s financial sector choices will help determine whether Southeast Asia follows a high-carbon or low-carbon development path. The transparency and accountability gaps identified in UK banking manifest in Singapore’s market as well, creating both risks and opportunities for leadership.

Ultimately, aligning finance with climate goals requires moving beyond aspirational statements to binding constraints, mandatory transparency, and accountability for misalignment. The alternative—continuing current trends—risks not only environmental catastrophe but financial instability as climate risks materialize and stranded assets accumulate. For both UK and Singapore banking sectors, the time for genuine transformation is now.

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