By Ben Elgin Judging from press releases and headlines, big banks appear to be leading the charge in the fight against global warming. Bank of America (BAC

) announced in March it would spend $20 billion over 10 years to fund "sustainable" business activity. Citigroup (C

) raised the bidding two months later with a $50 billion announcement. "As a global leader in financial services, we recognize our responsibility to confront climate change," Citi's chairman and CEO, Charles Prince III, said. HSBC, which declared itself "carbon neutral" in 2005, says it will consider the environmental impact of every project before lending money.

But in banking, as in other industries, green reality diverges from green hype. These and other financial institutions continue to pump money into dirty fossil-fuel businesses, even as bankers claim to have seen the light on climate change. When giant utility TXU last year pushed a plan for 11 new coal-fired power plants, sparking an outcry from environmental organizations, it turned out that Citi had signed on to help raise billions for the expansion (which has since been reduced to three plants). Citi is still involved with bankrolling TXU.

ALL ABOUT THE BRAND. Citi also has opened up credit lines totaling billions of dollars for Dynegy (DYN

) and American Electric Power (AEP

), large power companies each attempting to build several new coal-burning plants. Meanwhile, Bank of America recently arranged a $967 million loan to Allegheny Energy (AYE

), a coal-reliant utility based in Greensburg, Pa., and HSBC (HBC

) earlier this year helped underwrite the initial public offering of Malaysian timber company Samling, which has been criticized for logging rainforests.

HSBC says it will take years to get all of its clients in line with its environmental policy. "This is a transition," says Jon Williams, head of group sustainable development at HSBC.

"The banks with very 'sustainable' brands are not necessarily very sustainable banks," says Gregory Larkin a banking analyst with Innovest Strategic Value Advisors, an environmentally oriented investment-research firm in New York. "I think BofA and Citi are trying to brand themselves as the greenest banks of all without actually turning down any deals because of their carbon intensity."

"NOT A PUBLIC-RELATIONS MOVE." Proportions are another issue. Consider Citi's 10-year, $50 billion climate-friendly commitment, of which $31 billion, or $3.1 billion a year, is earmarked for financing clean energy. That's less than 6% of the $54 billion in loans it arranged for energy companies in the past year, according to Innovest.

Citi says that distancing itself from fossil fuel companies would hinder its ability to influence change, such as pointing out environmental risks to clients. "We can be most effective by remaining engaged," says Bruce Schlein, Citi's vice-president of environmental affairs.

Bank of America's director of public policy, Jim Mahoney, says it will incorporate environmental concerns into the business even as it continues to finance coal-burning energy. "This is not a demonstration project. It's not a public-relations move. This is a momentous effort," he says. "As a result, it will work its way slowly through our client relationships." Elgin is a correspondent in BusinessWeek's Silicon Valley bureau.