Wednesday 22nd July 2020, Paris – BNP Paribas published its financing policy for mining companies and operators of coal-related infrastructure online (1). It goes further than the one published three weeks ago regarding coal-based electricity producers (2) by excluding companies based on strictly defined criteria. Both policies aim to support the exit from thermal coal in EU and OECD countries by 2030 and by 2040 in other countries but are conditional upon their rigorous and proactive application. Reclaim Finance and Friends of the Earth France will closely monitor the financing provided by BNP Paribas, as well as by other French financial players, to all companies active in the coal industry in order to ensure that the commitment to the Paris financial centre to exit coal is met (3).
BNP Paribas’ policy includes all the criteria recommended by Reclaim Finance and its partners to respond to coal-related climate challenges, such as the prevention of expansion and the strict exclusion of all companies developing new coal projects. It also supports the exit by excluding today’s most exposed companies and those that have no coal-exit strategy by the dates chosen by BNP Paribas.
This policy goes further than the one published by BNP Paribas regarding financing for power producers three weeks ago. It now:
- is adopting strict exclusion criteria (4) for coal mining producers and coal-related infrastructure operators throughout the value chain and not just for coal-fired power producers. BNP Paribas has already committed to exit dates for the thermal coal sector (2030 in the EU, 2040 worldwide).
- is committed to excluding mining companies that do not have a strategy for exiting coal by 2030/2040. Energy producers have until the end of 2021 to adopt such a strategy.
On the other hand, large diversified mining groups may remain problematic:
- Glencore, for example, is one of the 10 largest coal producers in the world and is currently developing a new coal mine in Australia. It finances its coal-related activities through several financing subsidiaries but also at group level (5). Although BNP Paribas would have to exclude these subsidiaries, there remains an ambiguity when it comes to Group-level funding.
- The effectiveness of the policy can therefore only be assessed after Reclaim Finance monitors and analyses BNP Paribas’ financial data over the next 18 months.
Lucie Pinson, founder and CEO of Reclaim Finance, says:
“We can only welcome this policy. After much trial and error, BNP Paribas is now finally close to adopting a global coal sector policy fully aligned with climate science. Unfortunately, it should be noted that there are no strict exclusion criteria for coal-fired power producers and too many uncertainties regarding the operationalisation level of the mining companies’ exclusion. We will therefore scrutinise BNP Paribas’ application of these two coal policies and its financing to the sector, even more so than for other financial players.”
Lorette Philippot, Private Finance Campaigner for Friends of the Earth France, adds:
“Even though BNP Paribas’ coal policies do not go as far as those of other players in the market, notably Crédit Mutuel, they are enough to exacerbate Société Générale’s large gap when it comes to climate change. Not only is Société Générale a long way from having a coal exit policy (6), unlike its peers it has no exclusion policy on shale oil and gas either. Although it must be said that their peers leave a lot to be desired in this respect as well.(7)”
These commitments of varying scope are unsatisfactory in the face of the urgent need to redirect financial flows. Reclaim Finance and Friends of the Earth France call on the French government to sanction financial players who have not adopted a robust exit policy from the coal sector by the end of the year and to require by law their adoption by 2021 of a fossil fuel exit strategy aligned with the objectives of the Paris Agreement.
About Reclaim Finance
The Vision of Reclaim Finance is to create a financial system that supports the transition to sustainable societies that preserve ecosystems and satisfy people’s basic needs. We speak out against the negative impacts caused by certain financial institutions. We address these impacts and push for changes by pressuring these institutions and requiring political decision makers to change existing laws and practices. Our campaigns include recommendations and guidelines supported by recognised expertise. Our approach is radical and pragmatic. Our objective is to limit mainstream finance’s most harmful impacts by tackling targeted problems until we achieve measures with a real positive impact.
Reclaim Finance, Lucie Pinson, Executive Director: +33 (0)6 79 54 37 15 email@example.com
Reclaim Finance, Stuart Clelland, Communications: +33 (06) 24 94 51 48 firstname.lastname@example.org