BNP Paribas‘ strategic shift in energy financing is gaining momentum, evident from multiple rankings acknowledging the acceleration of its transition away from fossil fuels towards low-carbon energy production, the French bank said.

The transformative shift witnessed throughout 2023 has enabled the Group to expedite some of its key objectives.

Low-carbon energy

As revealed in its annual results published on February 1, 2024, BNP Paribas showcased a robust acceleration in financing for low-carbon energies. 

The credit exposures to low-carbon energy production now constitute 65% of the Group’s total stock of credit exposures to energy production. 

The commitment made in 2023 to achieve 80% low-carbon financing in energy production by 2030 has been pushed forward to 2028. Meanwhile, the Group is now targetting a remarkable 90% by 2030, highlighting an ambitious trajectory. 

In 2012, the share of low-carbon energy in BNP Paribas’ financing for energy production was merely 10%, reflecting a substantial shift over the past decade.

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By GlobalData

Between September 2022 and September 2023, BNP Paribas witnessed a significant uptick in its stock of low-carbon credits, amounting to an increase of 3.8 billion euros. The total financing for low-carbon energy, predominantly renewable, reached 32 billion euros. 

Simultaneously, the Group continued its commitment to reducing financing for high-emission energy sources, resulting in 6.4 billion euros reduction in the stock of fossil fuel loans within a year.

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Fossil fuel financing

BNP Paribas has strategically lowered its role in fossil financing by drastically reducing new loans to the oil and gas sector in 2023. 

As of the end of 2023, the ratio of financing flows to oil and gas extraction and production companies, compared to flows to renewable energy projects, stands at 1 to 11. 

Dealogic’s data indicates that out of the global banking industry’s 256 billion dollars granted to the oil and gas sector, BNP Paribas’ market share has dwindled to 0.3%. 

This marks a decline from the 2-3% range observed up until 2020. In a significant move, BNP Paribas has abstained from participating in any bonds related to the oil and gas sector since mid-February 2023. 

BNP Paribas says these actions underscore its commitment to aligning its financing practices with environmental sustainability, solidifying its position as a leader in the transition towards a low-carbon future.