BNP Paribas stops financing shale gas and oil companies
French bank BNP Paribas ceased financing all exploration, extraction, production and transport of unconventional hydrocarbons including shale gas and oil, also oil from bituminous sand. For the environmental organisations, it’s “a step in the right direction”.
Just two months before the Paris Climate Summit, BNP Paribas announced Wednesday its new engagements to fight against global warming. It is aligning all its investment and finance activities on the International Energy Agency’s scenario aiming at containing global warming beneath 2°c by the end of the century.
EU’s biggest bank in terms of assets will put up “a new worldwide financing policy regarding exploration, production and transport of unconventional hydrocarbons”. The bank points out that “shale gas and oil, and oil from bituminous sand are emitting too much greenhouse gasses for their production and they have a negative impact on the environment”.
The bank therefore ceases all its relations with companies of which the activity is related to exploration, production, distribution, marketing or trading of shale gas and oil, and oil sand. In addition, the bank stops financing projects “majorly dedicated”(30%) to transport and exploration of shale gas. BNP commits not to finance projects in the Arctic.
‘A step in the right direction’
The ‘Amis de la Terre’ NGO (Friends of the Earth), that opened BNP Paribas’s eyes at its last shareholder’s meeting, think that the bank’s decision constitutes a step in the right direction. “Despite some shadow areas, we salute the bank’s new direction: climate urgency requires us to give up on fossil fuels and excluding unconventional hydrocarbons is the next step after coal. We call on other banks to follow BNP Paribas and go even further”, says the NGO in a press release.
“There is a feeling of urgency to act, that is shared by all the ecosystem associations but also big energy clients are evolving their business model”, explains BNP’s social and environmental responsibility director Laurence Pessez, “We’re selective and we will not engage with actors that aren’t in this environmental transition. It’s a short term business renunciation but it will be compensated by new projects in renewable energy”.
On his Linkedin account, the BNP Paribas CEO explained the group’s ambition. “To finance economy in the 21st century is being an accelerator to the energy transition (…) As a banker but also as a trained engineer, my point of view is that energy transition today is the other name for economical development”, explains the CEO.
He also points out the company’s objective to reach carbon neutrality by the end of 2017 and that the bank already decided to stop financing any coal mines and coal powered electric stations.
The French bank has already taken a series of measures and engagements toward a greener future. In 2015, it set itself the objective of 15 billion euro of investments in renewable energy by 2020. By the end of 2016, it already reached 9,3 billion.
BNP Paribas had also planned to invest 100 million euro in five years in start-ups specialized in the energy transition. “For example, we invested in the German start-up Heliatek, producing ulta-light organic photovoltaic film that can be put on any type of roof”, adds Laurence Pessez.