“The EIB’s proposal to end financing for fossil fuels by 2020 is a massive step forward in climate leadership. With this move, the world’s largest multilateral lender is now poised to leave oil, gas and coal in the past.”

The European Investment Bank, one of the world’s most powerful financial institutions, announced on Friday that it would divest from all fossil fuel projects by the end of next year.

The decision marks the latest victory in a global movement that has so far claimed $8 trillion in divestments, and reflects the European Union’s ambition to lead the fight against climate change after a record-breaking heat wave scorched the continent throughout the summer.

“The bank will phase out support to energy projects reliant on fossil fuels: oil and gas production, infrastructure primarily dedicated to natural gas, power generation or heat based on fossil fuels,” the EIB said in a statement on Friday. “These types of projects will not be presented for approval to the EIB board beyond the end of 2020.”

The EIB was created in 1954 to lend in the public interest. According to the Financial Times, the “huge, unsupervised leverage machine” is known for rarely losing bets, spending “more on staff in a single year than it expects to lose on its entire €455 billion loan book.”

“Although it balance sheet, at €556 billion, is more than double the size of the World Bank and almost 10 times the European Bank of Reconstruction and Development, the EIB has largely steered clear of scrutiny,” wrote the Financial Times.

“This long-term transition (to greener energy sources) is profound. Solidarity is required to ensure that potentially vulnerable groups or regions are supported,” the EIB proposal document said.

Structural Investment In Fossil Fuels

Most of the world’s top banks and investment funds have declared their support for the Paris Agreement’s goal to cap global heating at 2°C above pre-industrial levels, but their actions often fail to match their rhetoric. In March, a report from major environmentalist groups showed 33 global banks have invested a combined $1.9 trillion in fossil fuel production since 2015, the year the agreement was negotiated.

Despite wind and solar being cheaper than coal and still improving in efficiency, top firms like JP Morgan, Blackrock, and Vanguard have chosen to invest in the creation of new fossil fuel infrastructure.

In ExxonMobil, for example, institutional investors hold a majority share, although shareholders have recently demanded the fossil fuel giant be more transparent about the dangers its business model poses in accelerating climate change. But despite publicly declaring its support for the Paris Agreement’s 2°C limit, the company has announced its plans to extract and sell all of the 25 billion barrels in its reserves while continuing to seek new sources.

Its leaders anticipate temperature rises as high as 5°C by the middle of the century, according to the investment campaign group Share Action, which seeks to divest workers’ pensions from the fossil fuel industry.

Critics argue that ExxonMobil’s alleged commitments are just a continuation of its history in deceiving the public about climate change. ExxonMobil’s scientists were among the first to warn of the danger carbon emissions posed to the planet in the 1980s, but the company’s leadership hid their findings and funded denialist misinformation campaigns that contradicted its own research for decades.

Divestment Movement Gaining Steam

The success of the fossil fuel industry has been tied to retirement pensions, mutual funds, and other forms of institutional investment for decades, leading groups like Fossil Free to fight for divestment in order to end the financial impetus for new fossil fuel infrastructure.

The European Investment Bank’s decision comes as the latest victory in a movement that claims to have secured more than $8 trillion in divestment commitments from over 1,000 philanthropies, pension funds, universities and other institutions. In May, Sen. Jeff Merkley introduced a proposal to allow federal workers to divest their retirement funds from fossil fuels, and the United Kingdom’s Parliament is considering a similar decision.

“The EIB’s proposal to end financing for fossil fuels by 2020 is a massive step forward in climate leadership,” Alex Doukas, of Oil Change International, told the Guardian. “With this move, the world’s largest multilateral lender is now poised to leave oil, gas and coal in the past.”