Paris, 22nd April 2021 – French banks BNP Paribas, Société Générale and Crédit Agricole have committed not to provide project financing to the highly destructive and controversial EACOP project, just two weeks after Total signed a series of agreements with the Ugandan and Tanzanian governments to start the construction of the pipeline.
First reported by French media outlet Les Echos, the commitment comes after pressure from campaigners, including a recent open letter from more than 260 African and international organizations to 25 banks urging them not to finance the construction of the EACOP (1). The decision means that six banks have now committed to steer clear of the project, after Barclays, Credit Suisse and ANZ made similar commitments (2).
The commitment from three long-time financial backers of the French oil and gas major constitutes a major snub to Total, which has been attempting to rebrand itself as a responsible company in a process of transition. Reclaim Finance welcomes the French banks’ commitment and calls on Natixis to follow suit. However, the NGO is also calling on the banks to go further and condition all further financing to Total on a commitment to no longer develop new oil and gas production projects, starting with the dirtiest and riskiest ones, such as those planned in the Arctic.
The four largest French banks have granted more than $16 billion in financing to Total SE between 2016 and 2020, in the form of loans, equity, and bond issuance. Crédit Agricole takes first place with $7.3 billion of financing, followed by BNP Paribas with nearly $6 billion (3).
Lucie Pinson, Founder and Director at Reclaim Finance, said: “We welcome this decision, which constitutes a major blow for this polluting and unjust pipeline. Natixis and other international banks should now follow their lead. But while the top French banks rightly refuse to fund this socially and environmentally damaging project, they are turning a blind eye to the rest of Total’s destructive activities. If they are serious about climate action, banks should condition all further financing to Total on an end to new oil and gas projects. Given Total shows no sign of giving up its fossil fuel hunger (4), investors should also take action and vote against the major’s climate strategy at its upcoming AGM.”
Ryan Brightwell, Researcher and Editor, BankTrack said: “This welcome signal from the French banks means more doors closing on Total’s efforts to get this extremely risky and damaging project financed. No responsible bank should support the building of a massive crude oil pipeline in the midst of a climate crisis, particularly one with impacts of this magnitude on nature and human rights. It’s high time for Standard Bank, SMBC and ICBC as the project’s financial advisors, to take these concerns seriously and withdraw their support.”
The decision of the French banks comes amidst attempts Total is trying to rebrand itself as a responsible energy company, encapsulated in a name change to TotalEnergies. Total will consult its shareholders at its AGM next month on a climate strategy which has been criticized by environmentalists (5).
French investors hold more than $13.8 billion in Total SE, the vast majority in equity, with more than 96% concentrated among a dozen asset managers. Amundi/Crédit Agricole holds nearly $9.7 billion, notably via the Plan Epargne Enterprise savings scheme, making it the world’s second largest shareholder in Total after BlackRock.
Chris Hohn from the respected Children’s Investment Fund Foundation, which leads the Say on Climate Initiative, yesterday remarked (6): “It’s obvious that shareholders should vote against Shell’s and Total’s proposed transition plans and against directors. It’s important that the world calls out those investors that don’t do so, both through shame and removing business from them.”
“Five-year targets are key. Without near-term targets, we’re not going to get anywhere, we’ll have vague commitments that don’t do anything. Targets and a plan to back them up are fundamental to the change we need.
“It’s absolute greenwashing and hypocrisy to say we’re supporting all this great stuff on climate and then support plans that don’t lead to any reductions.”