French finance still heavily addicted to oil and gas
Bruno Le Maire, French Minister of Economy and Finance, dreams of making Paris the capital of green finance. In October 2020, he called on the French finance sector to phase out support to non-conventional oil & gas. Nonetheless, financial institutions have since remained silent. With the exception of OFI AM, CNP Insurance and Sycomore, French banks, insurers and investors are still ensconced in these dangerous subsectors.
The Fossil Finance Scan developed by Reclaim Finance and endorsed by Friends of the Earth France, 350.org and Oxfam France, places the policies adopted by 56 French financial institutions under the microscope. More precisely, it examines their policies to phase out exposure to the five oil & gas sectors posing the greatest risk for the climate, the environment and local populations: tar sands, shale oil & gas, liquefied natural gas (LNG), Arctic and ultra deep offshore drilling.
The results are anything but positive: only 22 of the 56 financial institutions have adopted a policy to reduce their exposure to tar sands, one of the most polluting oil industries. There are only 16 policies on shale oil & gas and a mere six on LNG, two ticking climate bombs. Only 13 policies are identified which attempt to avoid drilling in the Arctic, a major climate and biodiversity hotspot and a mere four financial institutions restrict their support for deep-sea exploration
Shockingly, some major players – such as Amundi (of Crédit Agricole) and Lyxor (of Société Générale) – have not adopted any policies so far. And heavyweights like insurer AXA have no policies on shale oil & gas, the sector in which the majority of hydrocarbon growth is expected in the years to come.
The French financial sector is still backing oil and gas growth
Despite multiple and loud commitments to achieve carbon neutrality and align their portfolios with the 2015 Paris climate agreement goals, all French financial players can still support companies at the forefront of oil & gas expansion in the five most harmful sectors. The three biggest French banks have gaping holes in their policies, to the point that they rank 4th biggest financiers of fossil fuels in 2020.
Indeed, the policies in place are too weak to effectively phase out support to non-conventional oil & gas sectors. The reason: none of them exclude the oil and gas majors. Thus despite having an exclusion policy regarding the Arctic region, Credit Agricole bank ranks among the 10 biggest financiers of projects in the Arctic, because it is oil major Total’s top financier. This is also how BNP Paribas massively increased its support to fracked oil and gas, despite adopting a policy on the sector in 2017. There’s an irony: this is the bank which has gone furthest on these risky sectors, but according to the Banking on Climate Chaos 2021, was also the bank to have most increased its support to fracked gas in 2020, also becoming the top European fossil fuel financier in that year.
COP 26: a good time to clean up their act
In a few months’ time, Glasgow will host the most important global conference on climate change since COP21 in Paris. In a letter to all 56 financial institutions, Reclaim Finance calls on them to come forward with commitments to immediately stop any support to companies developing new projects in tar sands, shale oil and gas, LNG, Arctic and ultra deep offshore drilling. As the climate crisis worsens, efforts to exit oil and gas must accelerate.