ShareAction: Banks financing oil & gas production despite net-zero pledges
February 18, 2022
European banks are continuing to finance the expansion of oil & gas production despite making net-zero commitments, according to sustainability campaign group ShareAction.
Its data shows that 25 European banks provided $55 billion to companies expanding oil & gas production in 2021 even though 24 of them are members of the UN-convened Net Zero Banking Alliance (NZBA).
Since 2016, the 25 European banks have provided over $400 billion to companies with large oil & gas expansion plans, including Exxon Mobil, Saudi Aramco, Shell and BP. HSBC was found to be the largest contributor with $59 billion, followed by Barclays with $48 billion and BNP Paribas with $46 billion.
While NZBA members have committed to emission reduction targets, the alliance’s guidelines do not specifically cover fossil fuel expansion.
The 24 NZBA members contributed $33 billion to oil & gas companies with expansion plans since the alliance launched in April 2021, with $19 billion coming from four of the founding members HSBC, BNP Paribas, Barclays and Deutsche Bank.
Mark Campanale, founder and executive chair of Carbon Tracker, an independent financial think tank, said: “ShareAction… reminds banks that there is no pathway to net zero that involves funding an expansion in the production of fossil fuels.
“The International Energy Agency’s ‘NetZero2050’ report tells us that for the world to avoid 1.5C of heating, then no investment is needed anywhere in any new coal, oil or gas production. Now is the time… [to] announce a science-based moratorium on funding new fossil fuel projects.”
ShareAction noted that only Crédit Mutuel, La Banque Postale and Commerzbank (for new clients only) have started restricting finance to oil and gas expansion.
It has urged asset managers to make full use of their shareholder rights to demand banks implement policies to restrict finance for oil & gas expansion.
Kelly Shields, senior officer for banking standards at ShareAction, said shareholders were “instrumental” in pushing banks to adopt or strengthen restrictions on coal finance last year.
“This year they need to replicate that success with oil & gas expansion by voting for robust shareholder resolutions and against inadequate say on climate plans.”
ShareAction’s data is the latest warning for banks as the European Central Bank warned of unpreparedness for climate change released late last year.
Last Updated: 18 February 2022