2023-11-27 14:21:00
A few days before the opening of COP 28, which will take place in Dubai from November 30 to December 12, French banks are strengthening their announcement of their commitment to the fight against global warming. Last week, BNP Paribas announced that it would end its financing of projects linked to metallurgical coal.
For its part, Société Générale, which has also stopped its support for metallurgical coal since 2021, has just reiterated its commitments, made as part of the bank’s new strategic plan presented last September to investors. “ESG issues are at the heart of our new strategic roadmap”, recalled this Monday, November 27, in a press release, Slawomir Krupa, CEO of Société Générale.
In particular, it is a question of accelerating the reduction of the bank’s exposure to the oil and gas production sector, i.e. a reduction of 50% by 2025 compared to 2019, and 80% by 2030 The bank also undertakes to stop any offering of financial products and services to projects for new oil and gas production fields. Target objectives for reducing greenhouse gas emissions are established, by 2030, according to the sectors of activity: -70% for the oil and gas sector, -51% for the automobile sector, -20% for the cement sector, -63% for commercial real estate, and alignment at 0 for the steel sector. Finally, as it had already announced, the bank is preparing to launch a billion-euro investment fund targeted at the energy transition.
At the forefront of the climate fight?
French banks want to be virtuous in the climate field and even at the forefront of the fight. This is notably the message from BNP Paribas, the leading European bank, and regularly targeted by NGOs.
However, the bank clarified its commitments last May, including stopping all new financing for new oil or gas fields. As a reminder, it plans to devote 80% of its financing to the production of low-carbon energy by 2030 (60% at the end of 2022) with a minimum of 40 billion euros, and finally to reduce credits by 80%. of the bank on oil (from 5 billion in 2022 to 1 billion in 2030) and 30% on gas by 2030. Finally, the bank also gives targets for reducing emissions by sector by 2030: – 30% on oil, -25% on automobiles, -25% on steel, -24% on cement and -10% on aluminum.
“We are announcing a massive disengagement from upstream oil and gas and the means to achieve this” (Antoine Sire, BNP Paribas)
Finally, Crédit Agricole SA declined, at the end of December 2022, its 2030 emissions reduction targets for its customers in the oil & gas (-30%), electricity (-58%), automobile (-50%), commercial real estate (-40%) and cement (-20%). Similar objectives in other sectors (maritime transport, steel, aviation, residential property) are currently being evaluated. The group recalls that 60% of the Crédit Agricole group’s outstandings will be covered by the NetZero objectives by the end of the year.
The group has even set up a specialized subsidiary, Crédit Agricole Transitions et Énergies, whose mission is to invest in the production of low-carbon energy. This subsidiary should therefore invest one billion euros in the renewable energy sector, and even mobilize, by 2030, 19 billion euros in financing provided by the various entities of the mutual group.
Strong pressure from NGOs
However, NGOs continue to put strong pressure on banks so that they completely withdraw from financing large oil and gas projects, considered by climate defenders as “climate bombs”, like the oil project in Uganda or gas company in Mozambique from TotalEnergies. A study carried out by several NGOs, and published at the end of October and the results of which are accessible on the CarbonBombs platform, singled out French banks for their continued support for major oil and gas projects.
For the year 2022, the study estimates that the four main French banks (BNP Paribas, Société Générale, BCPE and Crédit Agricole) have invested nearly 18 billion dollars in the fossil fuel sector. And, since the 2015 Paris Agreement (COP21), which sets the objective of limiting the increase in average temperature to 1.5 degrees by the end of the century (an objective now almost unattainable according to experts), banks French companies have reportedly sunk $154 billion into oil and gas players who participate in some 450 fossil fuel extraction mega-projects considered “climate bombs” by NGOs.
In the same spirit, the NGO Reclaim Finance recently denounced the role of French banks in bond issues, “blind spot in the climate policies of financial players” according to the association, oil and gas companies.
In the meantime, oil production has never been so high in the United States and the biggest deals of the year in mergers and acquisitions concern the takeover of Pioneer Natural Resources, specializing in shale gas, by ExxonMobil (60 billion dollars) and Chevron’s acquisition of the American oil and gas producer Hess ($53 billion). The CEO of ExxonMobil justified, as usual, his operation by maintaining that oil and gas will remain at the center of the world’s energy mix for a long time to come.
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