The BNP Paribas bank, historical financier of the industrial sector, announced on Tuesday that it wanted to divide its financing for the oil extraction and production sector by five, leaving NGOs doubtful.
The first European bank undertook in a press release to reduce to “less than one billion euros” the amount of its outstanding loans in this area. This is a strong acceleration for the bank, which had so far communicated on a 25% reduction by 2025, even if oil refining and gas are not affected by this promise.
The group also claims not to have directly financed new oil projects since 2016. However, its support for companies continuing to develop new fields is partly counted as exploration and production.
The bank, which prides itself on having 55% of “low carbon” energies (renewable energies, nuclear and biofuels) in its energy financing portfolio, once morest 45% of fossil energies (mainly oil and gas), provides for a distribution 80-20 in 2030.
BNP Paribas thus aims to increase the outstanding amounts of its low-carbon, “essentially renewable” energy financing to 40 billion euros in 2030, compared to 24.8 in September.
With regard to gas, the banking group wishes to reduce its outstanding loans by 30%, estimated at 5.3 billion euros in September 2022, by reserving financing “primarily for new generation thermal power plants with low emission rates as well as ‘to security of supply, gas terminals and the gas transport fleet’.
“In 2015, when the Paris agreement was signed, financing for the production of low-carbon energy represented only a limited part of BNP Paribas’ loan portfolio”, assures its managing director, Jean-Laurent. Bonnafe. With these new objectives, “the group will have achieved 80% of its transition in less than 15 years”.
– “Too weak commitments” –
“BNP recognizes the need to reduce our dependence on oil and gas”, greeted AFP Lucie Pinson, but the director of the association Reclaim Finance would have liked the bank “to be much firmer”.
“Everything indicates that the French bank will maintain its financial support for a few large customers despite their strategy of expansion in fossil fuels, such as TotalEnergies”, she warns, deploring “also the absence of immediate measures on gas” .
BNP Paribas had been put on notice at the end of October by three NGOs accusing it of financing new oil and gas projects, in contradiction with its environmental “duty of vigilance”. The bank had until Thursday to respond to them before they decide whether or not to issue a summons.
“Forced to make announcements”, BNP Paribas delivers here “new commitments that are too weak”, estimate the three associations on Tuesday in a joint press release.
The associations say they are still waiting for the official response from BNP Paribas to their formal notice to make a decision.
But “these announcements completely leave aside the support of BNP Paribas via its activities of issuing shares and bonds, yet a key lever of financing for companies in the sector”, deplore Friends of the Earth France, Notre Affaire à Tous and Oxfam France.
According to these NGOs, “BNP Paribas has established itself between 2016 and 2021 as the world’s leading financier of 8 oil and gas giants which alone are planning more than 200 new fossil energy projects”.
For the International Energy Agency, the development of new oil and gas projects that would result in new carbon emissions for decades is incompatible with the Paris agreement, aiming for global warming of no more than 2°C in 2050 compared to the pre-industrial period.
While La Banque Postale has already committed to phasing out fossil fuels by 2030, the effort is much greater for BNP Paribas.
Societe Generale, for its part, had indicated in October that it wanted to reduce its exposure to oil and gas production by 20% by 2025 compared to 2019.
Crédit Agricole for its part has promised to reduce its exposure to oil extraction by 25% between 2020 and 2025. The group also aims to reduce by 30% the absolute level of CO2 emitted by its customers in their oil-related activities and to gas by 2030.
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