Coordinated by ShareAction, the letters were written to banks including Barclays, BNP Paribas, Crédit Agricole, Deutsche Bank and Societe Generale.
The investors, who include Candriam, La Française Asset Management and Brunel Pension Partnership, expressed concern that new oil and gas fields may jeopardise the global path to net zero.
The investors also warned that these activities were holding back the renewable energy revolution in Europe, which they said was more important than ever as the continent battles with uncertain energy supplies in the wake of Russia's invasion of Ukraine.
The amount of financing these European banks provided to oil and gas expanders between 2016-2021 is as follows: Barclays – $46bn, BNP Paribas – $46bn, Crédit Agricole – $34bn, Societe Generale – $34bn, and Deutsche Bank – $28bn.
Jeanne Martin, head of the banking programme at ShareAction, said: "These investor-backed letters should be a wake-up call to banks that have made net-zero commitments. First, they must stop directly financing new oil and gas fields.
"Second, banks must urgently turn their attention to the companies that are enabling new oil and gas fields from being discovered and developed. As the letters point out, direct financing is only the tip of the iceberg.
"Investors are putting these banks on notice that they will face ever increasing pressure if they don't act soon to reverse their financing of new oil and gas."
According to ShareAction, these banks were the largest European financiers of top oil and gas expanders after HSBC over the period 2016-2021.
Excluding financing of new oil and gas fields is an important step towards implementing their net-zero ambitions, the investors said.
The letter adds that asset financing for new oil and gas represents only 8 per cent of total financing to top oil and gas expanders. Therefore, they also want changes to investment plans in the companies behind these new oil and gas fields.
ShareAction's latest survey of European banks' climate and biodiversity practices shows that only timid action has been taken by European banks to cease new oil and gas activities at the corporate level.
The survey found that three European banks have introduced corporate finance restrictions to oil and gas expansion, and four banks require transition plans from their oil and gas clients by a set date.
HSBC, which has an influential position as both Europe's largest bank and its largest financier of top oil and gas expanders, announced last December that it will no longer directly finance new oil and gas fields.
In December, it called on European banks to take more action on tackling climate change including broader efforts to reduce emissions and safeguard nature.
A spokesperson from Barclays said: "As one of the first banks to set an ambition to become net zero by 2050 we are clear that addressing climate change is an urgent and complex challenge.
"We can make the greatest difference as a bank by working with customers and clients as they transition to a low-carbon economy, focusing on facilitating the finance needed to change business practices and scale new green technologies.
"This includes many oil and gas companies that are actively engaged and critical to the transition, and committed significant resources and expertise to renewable energy.
"We are in regular dialogue with many stakeholders, including ShareAction, on climate and broader sustainability topics and we value their ongoing thoughtful engagement."
A spokesperson from Deutsche Bank said: "We have strict guidelines for business activities in carbon-intensive sectors and have significantly reduced our engagement in these sectors since 2016.
"Deutsche Bank has established business restrictions for coal and oil and gas sectors and we are committed as a member of the Net Zero Banking Alliance to reducing our financed emissions in the oil and gas sector: 23 per cent by 2030, and 90 per cent by 2050."
