LONDON: Banks gave 81 cents in financing support to low carbon energy supply for every dollar they provided to fossil fuels in 2021, a report showed on Tuesday, but they will need to ramp up their commitments much further for the world to hit its climate goals.

Several climate scenarios suggest that to limit global temperature rises to 1.5 degrees Celsius above the pre-industrial average, the world needs to be investing $4 in renewable energy for every $1 invested in fossil fuels by 2030. Energy analysts BloombergNEF compiled data from 1,142 banks for what it calls an “Energy Supply Banking Ratio” to assess whether banks are aligning their financing to the real economy and the 1.5 degrees target.

In 2021, bank financing for energy supply totalled $1.9 trillion, just over $1 trillion of which went to fossil fuels and $842 billion to low carbon energy projects and companies, according to the report.

The bank financing ratio, of 81 cents to $1, was below the global energy supply investment ratio of 90 cents to $1.

The latter ratio has been climbing in recent years from around 0.45:1 between 2011 and 2015.

“While a bounce in fossil-fuel investment is expected to counter the disruption caused by Russia’s invasion of Ukraine, the underlying economics of low-carbon energy supply mean its growth will be sustained,” said BloombergNEF CEO Jon Moore, noting 2022’s 15% rise in low carbon energy supply investment.