Reclaim Finance is calling on BNP Paribas to follow through on its commitment and demand that the companies in its portfolios stop developing projects that it no longer intends to finance directly.
In addition to measures restricting its support for unconventional oil and gas, BNP Paribas has announced further steps to complement and clarify the measures announced in January. In particular, it has expanded its commitment to no longer provide dedicated financing to new oil fields with a similar commitment to new gas fields.
The bank has not made a commitment to no longer finance liquefied natural gas terminals, unlike the Dutch bank ING, even though these projects do not fit into the IEA’s Net-Zero Emissions scenario any more than new oil or gas fields do.
This measure, which complements the commitment to stop financing new oil fields, is not enough to meet the objective announced in January of reducing outstanding oil extraction and production financing by 80% by 2030. The majority of BNP Paribas’ oil and gas financing is provided through financial services provided not to specific projects but to companies. BNP Paribas, therefore, indicates the following measures:
- a commitment to stop financing specialized oil production companies;
- a commitment to no longer provide reserve-based loans to support oil production
- to monitor its remaining exposure using the PACTA methodology.
Lucie Pinson, Director of Reclaim Finance: “We welcome BNP Paribas’ clarification as to how it intends to meet the targets announced in January. But precision and ambition are two different things and this new announcement is not enough to overturn the verdict given in January.
“BNP Paribas will still support its main clients, the European majors and other so-called integrated companies expansion plans, especially gas expansion, even though these companies do not have strategies in place that are in any way compatible with the objective of limiting global warming to 1.5°C.”
The bonds that these companies are particularly fond of are still not covered by the bank’s commitments and the monitoring of outstanding financing until 2030 still allows BNP Paribas to provide new financial services to TotalEnergies and others for many years.
Since 2016, the bank, which is the largest banker to Shell, BP and Eni, has provided more than US $45 billion to the top 9 European and US oil and gas companies – this represents 27% of the bank’s financing to the entire oil and gas sector. Even the measure on reserve-based lending could spare these companies.
Pinson said: “Decarbonising one’s own balance sheet without decarbonising the real world is a futile approach and we call on BNP Paribas to follow through by requiring its clients to stop developing projects that it no longer intends to finance directly.
“It must make the cessation of oil and gas expansion a red line that must not be crossed, and commit to progressively restricting all financial services to companies that do not meet this demand.
“This is the only way in which BNP Paribas will be able to prevent and protect itself against the risks of a rapidly changing climate.”
BNP Paribas claims that these companies are in transition, an argument mainly based on their role in the development of “low carbon” projects.
But this claim does not stand up to analysis: the Global Oil and Gas Exit List lists the 9 companies above as among the largest developers of new oil and gas fields and analysis of their production targets and capital expenditure shows that renewable energy remains the poor cousin in their strategies, accounting for well under 22% of their energy mix by 2030.