Summary

The petrochemical industry is producing synthetic fertilisers, plastics and other products in ever-increasing quantities, which has far-reaching consequences for global climate goals. Rising demand for these products necessitates a growing need for crude oil and the continued extraction of fossil fuels. While public awareness of fossil energy’s impact on climate change has increased, the petrochemical industry remains largely under-reported. Major fossil fuel corporations are expanding their petrochemical capacities as demand for energy consumption fossil fuels declines. European banks that finance and invest in these corporations are therefore active participants in exploitative and polluting supply chains.

Introduction: petro… what? On the petrochemical industry and its relationship to climate, the environment and human rights

Industrial agriculture is one of the largest consumers of fossil-based products, with synthetic nitrogen fertilisers forming the basis for almost half of the fertilisers used in global food production. Petrochemicals account for 74 per cent of products used for plastics or fertilisers, with the remainder used for herbicides, pesticides, paints and solvents. Plastics are found in over 96 per cent of all industrial goods. Greenhouse gas emissions associated with petrochemicals have tripled over the last 25 years. The sector is projected to become the largest source of global oil demand, intensifying the long-term depletion of fossil resources even as the energy sector transitions to renewable sources.

The industry causes significant environmental damage through plastic waste and nitrogen pollution, which leads to water pollution and oxygen depletion in ecosystems. Health risks to those living near petrochemical plants include disorders of the nervous system and higher risks of cancer. In the US state of Louisiana, some communities face a cancer risk three times higher than the national average, an area known as ‘Cancer Alley’. Of the 16,000 chemicals found in plastic, over 4,200 pose a documented health risk to humans. Furthermore, the industry exerts significant political influence; the European Chemical Industry Council had the highest lobbying expenditure of all 12,421 registered organisations in the EU in 2021.

The relationship between banks and the petrochemical industry: financial research and findings

German and European banks continue to provide substantial capital to petrochemical firms through lending and bond issuance. Research shows that financing is concentrated among four major corporations: BASF (4.6 billion euros), Dow, Inc. (2.9 billion euros), ExxonMobil (2.3 billion euros), and LyondellBasell (1.7 billion euros). Between January 2023 and December 2025, these four corporations received over 11.6 billion euros in financing. German company BASF was the only entity financed by every financial institution examined.

As of 31 December 2025, the selected banks were invested in petrochemical companies with a total of 11 billion euros. ExxonMobil alone accounted for over 8 billion euros of these investments. The Swiss bank UBS was the largest investor with 4.3 billion euros, followed by Deutsche Bank with 1.5 billion euros, Barclays with 1.2 billion euros, and HSBC with 1.0 billion euros. While Chinese firms like Sinopec and PetroChina are dominating the market, European bank investments in them remain relatively low as the Chinese state holds stakes of over 90 per cent in those companies.

Companies & case studies

The report highlights several case studies where corporate actions conflict with human rights and environmental standards. BASF is cited for sourcing platinum from the Marikana region in South Africa, where significant environmental damage and the 2012 Marikana massacre occurred. Dow, Inc. has been accused of environmental racism in Texas, where its Freeport plant is a major polluter of wastewater. ExxonMobil faced a two-decade legal battle over allegations of serious human rights violations, including torture and killings, linked to security forces at its facilities in Aceh, Indonesia. LG Chem was responsible for a fatal gas leak in India in 2020 that killed 15 people and left thousands ill. LyondellBasell was identified as a major emitter of toxic pollutants in the US, ranking first for toxic air emissions in the Toxic 100 Index based on 2021 data.

Bank profiles

Bank policies regarding the petrochemical sector are often vague or non-existent. Commerzbank and LBBW subject petrochemical projects to case-by-case assessments but lack specific exclusion criteria. Deutsche Bank and UniCredit regulate the sector only indirectly through general oil and gas guidelines that focus on upstream and midstream activities. Many banks, including UBS, did not comment on the research findings or the specific names and figures presented in the report.

Analysis, conclusions and recommendations

The report concludes that up to 400 billion US petrochemical dollars could end up as stranded assets due to regulatory, environmental and technological developments. It recommends that banks develop comprehensive financing and investment policies covering the entire petrochemical lifecycle. Banks should explicitly identify intersections with the fossil fuel and chemical industries and cease financing expansions of the petrochemical industry. They are also urged to develop plastics policies aimed at divesting from plastic-intensive companies and promoting circular models. Policymakers are encouraged to recognise the industry as a driver of climate change and prevent greenwashing through legislation. Finally, companies are advised to make ambitious, time-bound, and binding commitments to reduce emissions and increase transparency regarding Scope 3 emissions.