Bank Fees for Green Debt Surpass Fossil-Fuel Financing

It’s official. For the first time since the unveiling of the Paris climate agreement in 2015, banks earned more fees arranging green-related bond sales and loans than they did helping fossil-fuel companies raise money in the debt markets.

To be sure, the final tally for 2021 was incredibly close. Overall, banks pocketed an estimated $3.4 billion from green-labeled debt deals, compared with $3.3 billion from their work with oil, gas and coal companies, according to data compiled by Bloomberg. For context, in 2020, the split was $1.9 billion for green and $3.7 billion for fossil fuels.

The question now (at least for the less cynical among us) is are banks genuinely interested in helping companies and governments make the transition to clean technologies and energy efficiency? Or are they simply taking advantage of a market where they can currently earn hefty fees—a market where, coincidentally, transparency has yet to arrive and greenwashing runs rampant?

No bank stands out more than JPMorgan Chase & Co. as a barometer for where the financial-services industry is heading when it comes to debt advertised as green or sustainable.

In 2021, the New York-based bank ranked No. 2 in fees earned for organizing green-labeled bond sales and loans, with an estimated $159.2 million of revenue, just behind BNP Paribas SA:

Green debt fees 2021:

  1. BNP Paribas $159.6 million
  2. JPMorgan $159.2 million
  3. Credit Agricole $123.8 million
  4. Citigroup $121 million
  5. Deutsche Bank $105.9 million