(Bloomberg) -- Royal Bank of Canada topped JPMorgan Chase & Co. last year to become the world’s largest backer of fossil-fuel companies, providing more fodder to critics who say the lender isn’t living up to its climate commitments. 

Royal Bank provided $42.1 billion of funding to the industry, up 4.2% from a year earlier, surpassing the $39.2 billion provided by JPMorgan, according to the Rainforest Action Network’s 14th-annual “Banking on Climate Chaos” report. The figures include lending as well as debt and equity underwriting.

While Canada’s largest lender by assets has committed to zeroing out the emissions associated with its financing activities, environmentalists have increasingly targeted its involvement with fossil-fuel companies. The Toronto-based lender has especially come under fire for working with Canada’s oil-sands firms, which produce one of the world’s most carbon-intensive grades of crude.

“RBC is really a critical financier for tar sands, which is problematic both from an environmental and a human rights perspective,” April Merleaux, research manager for Rainforest Action Network, said in an interview. 

JPMorgan had led the rankings since 2019, but its financing to the industry fell 42% last year. Citigroup Inc. and Wells Fargo & Co. posted similarly large declines. Many US oil producers used last year’s record profits to pay down debt, while others turned to private markets for financing. Investment-banking activity also slumped due to broader market turmoil.

“We provide financing across the energy sector: supporting energy security, helping clients accelerate their low-carbon transition and increasing clean energy financing with a target of $1 trillion for green initiatives by 2030,” said Charlotte Powell, a spokesperson for New York-based JPMorgan, in an emailed statement.

Wells Fargo, Bank of America Corp. and Citigroup round out the top five, with US banks accounting for a combined 28% of all fossil-fuel financing last year, according to RAN’s report. Mitsubishi UFJ Financial Group Inc. led in Asia, while BNP Paribas SA was tops in Europe.

Royal Bank said the report’s authors don’t validate their findings with the bank, so it can’t confirm their conclusions. The lender also said the report doesn’t measure its progress in meeting climate goals and that it’s confident with its strategy.

“We are actively working with our clients, governments and many stakeholders toward a net zero economy,” spokesman Andrew Block said in an emailed statement. “This includes financing for renewable-energy projects and providing capital to clients in higher-emitting sectors to support their transition journeys as there aren’t enough renewables available today to power our world.”

Royal Bank set a goal last year of lowering the intensity of emissions that its oil and gas clients generate from operations — known as Scope 1 and 2 — by 35% by 2030, relative to 2019 levels. It’s also planning to reduce the intensity of emissions from the burning of the fuels those companies sell — Scope 3 emissions — by 11% to 27% in that time frame. 

Using emissions intensity — instead of absolute emissions — allows Royal Bank to increase lending to high-emitting sectors and lets its clients emit more carbon through rising production as long as their operations are growing more efficient. 

Strong interim targets for absolute emissions are important because the scientific consensus is that global carbon dioxide emissions need to fall by about 45% from 2010 levels by 2030 to limit global warming to 1.5C (2.7F), according to the Intergovernmental Panel on Climate Change.

“Those intensity targets really seem like they’re creating a kind of loophole,” Merleaux said. “We need to see the scope three absolute emissions reductions and we need to see them on a really ambitious timeline.”

Royal Bank is among the 49 of 60 banks ranked in the report that have made net zero commitments. Still, the lenders funneled a combined $150 billion last year to the 100 largest fossil-fuel companies.

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