By Katrina White, Senior Associate, Sustainable Finance and Michael Freeman, Account Manager, Commercial, BloombergNEF
Getting on track to limit global warming to 1.5C hinges on investment in low-carbon energy supply averaging four times that in fossil fuels this decade. That balance – known as the Energy Supply Investment Ratio – is based on BloombergNEF’s analysis of commonly referenced climate scenarios from intergovernmental institutions such as the International Energy Agency.
This concept can be applied to the flow of bank-facilitated financing through the Energy Supply Banking Ratio (ESBR), defined as the total debt, equity and project finance an institution has facilitated toward low-carbon energy supply relative to fossil fuels each year.
Calculating an Energy Supply Banking Ratio, BNEF’s latest ESBR guide, outlines the steps necessary for banks to calculate their own ratio of low-carbon to fossil-fuel banking activity in line with BNEF’s Energy Supply Banking Ratios report framework and utilizing Bloomberg’s Enterprise Data Products. This document is process and data-focused, with the intention to help banks to closely follow the BNEF methodology.
Context for ESBR calculation:
- This concept can be applied to the flow of bank-facilitated financing through the Energy Supply Banking Ratio (ESBR), defined as the total debt, equity and project finance an institution has facilitated toward low-carbon energy supply relative to fossil fuels each year.
- Investors have been pushing for bank-level disclosure of energy supply financing ratios, beginning with resolutions filed by the New York City Comptroller in 2024 and more recently through proposals filed by the Canadian Shareholder Association for Research and Education (SHARE) in 2025.
- As a result of this campaign, several banks, including Citigroup Inc., JPMorgan Chase & Co., Royal Bank of Canada and The Bank of Nova Scotia have committed to disclose their own ratios of low-carbon to fossil-fuel financing activities. JPMorgan was the first to publish its own ratio and methodology in November 2024.
For further insights, look back at last year’s implementation guide, which outlines the series of steps involved in calculating a ratio of low-carbon to fossil-fuel banking activity and a range of possible design choices and scope of data inclusion that an individual bank may wish to consider.
Download the how-to guide here.
BNEF clients can access the full Energy Supply Banking Ratios research report here.