Paris, December 14, 2023 – Crédit Agricole’s announcement today (1) reflects the limits of the COP28 agreement adopted yesterday in Dubai (2): a transition away from fossil fuels that leaves the door open to financing oil and gas expansion. Despite the adoption of ambitious decarbonization targets, the French bank has allowed room to finance new fossil fuel infrastructure projects such as liquefied natural gas (LNG) terminals, as well as companies developing new oil and gas fields or infrastructure.
Crédit Agricole is raising its target for the absolute reduction of financed emissions linked to loans to the oil and gas sector to -75% by 2030 with a 2020 baseline, compared with a previous target of -30% (3). Despite its apparent ambition (4), achieving this target does not guarantee an end to support for companies developing new oil and gas projects (5), which runs counter to scenarios aiming to limit global warming to 1.5°C. The proof is in the pudding: while Crédit Agricole may have exceeded its previous target of 30% with a 40% reduction since 2020, but Reclaim Finance has identified at least 21 transactions benefiting just 12 major oil and gas companies over the same period (6).
By adopting an ambitious target for cutting oil and gas sector emissions, Crédit Agricole is prepared to clean up its customer portfolio by no longer financing those who are not rapidly decarbonizing their activities. But while this sends a welcome signal, the approach is not enough to claim to be aligned with a target of limiting global warming to 1.5°C. The urgency of climate change requires action now against oil and gas expansion, but Crédit Agricole risks providing new, untargeted financial services to companies developing new fossil fuel projects, which runs counter to its own climate commitments. We will be paying very close attention to all financing to the energy sector in the coming months and denounce any transaction incompatible with a robust 1.5°C trajectory.
Lucie Pinson, Director of Reclaim Finance
Crédit Agricole has announced strict exclusion measures that mean it will stop financing gas field projects. Like the December 2022 decision not to finance any new oil fields, this measure is not likely to have any material impact as Crédit Agricole does not appear to have granted any such financing in recent years (7). But, the bank has directly financed new LNG terminals, such as Port Arthur in the USA in March 2023 (8). And while it is still advising TotalEnergies on the development of Papua LNG in Papua New Guinea (9), no commitment has been made to stop financing this type of project in the future.
Crédit Agricole is missing a trick. At the very least it could have aligned itself with the policy of Société Générale or HSBC, who have put an end to their direct financing of certain new LNG terminals. Any new liquefied natural gas project hampers our chances of limiting global warming to 1.5°C, in addition to entailing major financial risks, given that 70% of projects already under construction or approved may not be profitable, according to the IEA. Crédit Agricole’s refusal to end its support for this type of project and to give up its financing of Papua LNG perpetuates the confusion over which energy should be abandoned and which should be developed. Make no mistake about it, gas is a fossil fuel and no emissions capture mechanism will make it compatible with a 1.5°C trajectory.
Lucie Pinson, Director of Reclaim Finance
Crédit Agricole’s announcement also excludes independent companies active in oil and gas extraction. These companies are responsible for 19% of 2022 production and 20% of expansion plans (10). In other words, the majors and integrated companies in the oil and gas sector, which include some of Crédit Agricole’s major clients, have been spared. Crédit Agricole says it wants to support all its customers in the transition, but intends to assess each transaction on a case-by-case basis in the light of their commitments.
So much useless procrastination, playing into the hands of polluters who want to slow down the transition to sustainable energy. TotalEnergies, Eni and Saudi Aramco are not in transition, and there is no justification for non-earmarked funding for them until they have given up developing new fossil fuel projects. Crédit Agricole says it wants to be a player in the transition and in renewables. Let it devote itself fully to this, without wasting time with the players of the past.
Lucie Pinson, Director of Reclaim Finance
Finally, Crédit Agricole has announced a number of targets for the financing of renewables, low-carbon energy, clean technologies and energy efficiency. These commitments are welcome in order to meet the targets of tripling renewable energy capacity and doubling energy efficiency measures by 2030 agreed in the Dubai agreement, but lack clarity, particularly with regard to how they fit with previous commitments and the scope of energy sources and technologies covered. Reclaim Finance calls on Crédit Agricole to clarify these commitments and restrict its financing objectives to sustainable energy, avoiding the inclusion of false solutions such as CCS.
