The 2020 edition of the “Banking On Climate Change” report reveals that international banks have provided nearly $2.7 trillion in financing for fossil fuels since the Paris Accord was adopted, with the volume of financing increasing every year since 2016.
BNP Paribas presided over the second-largest increase in fossil fuel financing of any bank in the world between 2018 and 2019, with an increase of 72%. As the 13th-largest financier of all fossil fuels, and the third- and seventh-largest financiers of oil and gas production companies in the offshore and Arctic, BNP Paribas has a problem to solve with the majors.
The data also shows that the majority of the banks analysed, including Crédit Agricole and Société Générale, have increased their support for the 100 companies that are planning the most new coal, oil and gas projects and confirms Société Générale’s growing appetite for shale gas.
The latest version of the most comprehensive report on fossil fuel financing by international banks, “Banking on Climate Change 2020,” was published on March 18, 2020.
A collaboration between Reclaim Finance, Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International and Sierra Club, and supported by more than 250 organisations from 45 countries around the world, including Friends of the Earth France, the report aggregates the loans and equity and bond issues of 2,100 companies in the coal, oil and gas sectors worldwide over the period 2016-2019.
- 35 international banks provided $2.7 trillion in financing for fossil fuels after the adoption of the Paris Accord in December 2015.
- North American banks still dominate, with nine banks from the US and Canada among the 15 largest financiers of fossil fuels. JPMorgan Chase is the world’s leading fossil fuel financier.
Source : Banking on Climate Change 2020
- Three European banks are among the top 15 largest financiers over the period 2016-19: Barclays is in the lead, followed by HSBC and BNP Paribas. With over USD $30.6 billion of financing last year, BNP Paribas was the largest European financier of fossil fuels in 2019, and the ninth-largest internationally.
Comment by Lucie Pinson, Managing Director of Reclaim Finance :
“BNP Paribas is a striking example of the abject failure of banks to respond to the urgency of the climate crisis. Instead of adopting a rigorous approach that prevents the expansion of fossil fuels on the one hand and facilitates their gradual exit on the other, banks are following an à la carte approach, reducing their financing to a portion of fossil fuels and increasing it elsewhere. Thus, BNP Paribas has drastically reduced its financing to companies mainly active in the oil sands and shale oil and gas following the adoption of a new policy in 2017. But the 72% increase in its financing for fossil fuels between 2018 and 2019 perfectly illustrates the vacuity of its policy on coal and, above all, its heavy dependence on the oil and gas majors. As long as BNP Paribas continues to finance Eni, Shell, BP or Total unconditionally, it will finance climate chaos.”
Over the period 2016-19, French banks ranked 13th (BNP Paribas, 84.2 billion), 22nd (Société Générale, 54 billion), 24th (Crédit Agricole, 45.9 billion) and 28th (Natixis, 30.5 billion). BNP Paribas is therefore largely dominant in financing from France, with support 56% higher than that of Société Générale.
Comment by Yann Louvel, policy analyst at Reclaim Finance, who has analysed all the policies adopted by European banks:
“French banks are doing relatively better than their competitors, but they are completely failing to align themselves with the climate objectives of the Paris Accord. They apply some of the most stringent sectoral policies on fossil fuels. But with nearly $70 billion dollars for companies developing new fossil fuel projects, French banks have still not grasped the urgency of the climate and the demands of scientists.”
Contrary to the conclusions of IPCC scientists on the urgent need to organise the switch from fossil fuels in order to drastically reduce our greenhouse gas emissions, the Report Card data show that banks are increasingly fueling the climate catastrophe.
- Funding for fossil fuels has increased every year since the adoption of the Paris Accord in December 2015, with a 15% increase between 2016 and 2019.
Source : Banking on Climate Change 2020
- BNP Paribas is the second bank (1) to have experienced the strongest increase in financing between 2018 and 2019, with support up 72%. Without revising its coal policy, BNP Paribas could continue to increase its financing for coal-fired power generation. Moreover, this sharp increase also demonstrates the ineffectiveness of the policies adopted by BNP Paribas to curb its financing to the oil and gas majors.
- The report also tracks financing to the top 100 companies planning new coal, oil and gas extraction and related infrastructure. Of the $2.7 trillion in fossil fuel financing, $975 billion went to these companies. Despite the urgent need to stop any further expansion of fossil fuels immediately, funding to these irresponsible companies has skyrocketed by 40% between 2018 and 2019. The four major French banks analysed in this report have all increased their financing to these companies in the last year.
The report analyses financing to the most dangerous sectors on all ESG – environmental, social and governance – criteria: Arctic and offshore oil and gas extraction, oil sands development, shale oil and gas production, coal, and liquefied natural gas (LNG). Analysis of the data provides a glimpse of the trends emerging for French banks:
- With USD $15 billion in offshore financing, BNP Paribas is the third-largest international bank financing this growing sector. And despite a policy of exclusion in the Arctic, BNP Paribas remains the seventh bank to have financed the most in this sector since COP21. BNP Paribas’ main clients include the oil and gas majors ENI ($8.2 billion), Shell ($3.6 billion), BP ($2.6 billion), Saudi Aramco ($1.9 billion) and of course Total ($1.3 billion).
- Despite a policy of excluding shale oil and gas, BNP Paribas has multiplied its financing to the sector by nine over the past year. Once again, this is due to its support for the majors Shell and Chevron, which are the largest producers and developers in the sector but could be below BNP Paribas’ exclusion thresholds due to their broad diversification (2).
- With a total of USD $8.5 billion in financing for shale oil and gas and LNG since the Paris Accord, Société Générale is the top French bank supporting these booming industries, particularly in the United States, and the sixth in the world to support LNG. Société Générale has almost tripled its financing to these two sectors between 2018 and 2019, and nothing will prevent these amounts from continuing to grow as long as no limits are placed on these supports.
The report also assesses banks’ policies on fossil fuels. Despite the many announcements of new policies in recent months, no bank gets even half the points.
Download the Banking on
Climate Change report (8 Mo)