“Any new oil or gas project locks in emissions for decades,” denounces Lucie Pinson of Reclaim Finance

According to a report from several NGOs, the 60 largest banks have lent or arranged more than $700 billion for the benefit of fossil fuels in 2023. Lucie Pinson, director of the non-governmental organization Reclaim Finance which promotes energy divestment fossils, gives his analysis.

Since the Paris Agreement in late 2015, the world’s 60 largest banks have granted $7.105 billion to oil, gas and coal. American banks remain at the top of the ranking with 31% of financing granted to the sector, ahead of Chinese banks (15%), Canadian (13%), Japanese (12%). In 2023, the amount devoted by these banks will still reach more than 700 billion dollars, although this amount is decreasing. This is what we learn in the report from a consortium of NGOs, the “Banking on Climate Chaos” report.

Lucie Pinson is an activist for the energy transition and heads the non-governmental organization Reclaim Finance which promotes divestment from fossil fuels.

Lucie Pinson: French banks, and in particular the four major French banks BNP Paribas, Crédit Agricole, Société Générale and the Banque Populaire – Caisse d’Épargne group, continue, despite their climate commitments, to finance the expansion of fossil fuels. In particular, $67 billion was allocated to the expansion of fossil fuels, the majority of which is linked to the expansion of oil and gas since 2021.

This is a decreasing amount, as at the international level. There are several reasons, several factors which can explain this decline. Already, the rise in rates which does not favor access to capital by companies. And in this context, we can think that companies may have favored the use of self-financing. They were also able to turn to other sources of financing alternative to banks, such as private equity (investment in unlisted companies). The decline in bank financing of fossil fuels may therefore only be cyclical.

franceinfo: The banks, however, assure that they are committed to the transition. BNP Paribas, for example, aims to devote 90% of its financing to renewable energy in 2030. Crédit Agricole promises to no longer invest in new fossil fuel extraction projects. Isn’t there a real turning point?

For Crédit Agricole, in reality, the bank withdrew quite quickly afterwards, by email, to tell us that it could still continue to finance new liquefied natural gas terminals. Concerning BNP Paribas, we may have a transformation underway in its portfolio, since the bank refrained last year from participating in numerous transactions aimed at companies in the sector. But here again we see that the door is not completely closed, particularly for loans. Last December, she participated in a loan to the Italian company ENI. What you need to understand is that there may be a drop in funding. However, this does not mean alignment with scientific recommendations.

“Today, any new oil or gas project locks in emissions for decades. Emissions that we cannot afford if we want to limit warming to 1.5 degrees.”

Lucie Pinson

at franceinfo

Is it a strong lever today, that of finance in the fight against global warming?

Yes, because we must remember that the world of tomorrow is being built today in the decisions of banks, investors and insurance companies. What we finance today will last for many years and therefore will shape the world as it will be in 10 years, in 20 years, even in 30 years. Even though we should maintain funding for fossil fuels, because we are not going to get out of fossil fuels overnight, we must ensure that there is no more money going to expansion. , to the development of new fossil fuel projects. It is they who pose the problem because they are incompatible with a 1.5 degree trajectory.

In your opinion, should the State intervene and put in place restrictive regulations?

Banks could act on scientific recommendations. They did it for coal overall. So they could also do it for oil and gas. But even though there may be a transformation underway, it does not go far enough and above all it does not go fast enough. So we need intervention from the regulator and public authorities. The French government is calling on countries to act against climate change in favor of an exit from fossil fuels. These were the watchwords of President Emmanuel Macron during the last COP. But it is not admissible to hold this discourse and let French banks continue to finance new fossil energy projects abroad.

“It should be remembered that French banks are the first banks in the European Union to finance new fossil fuel projects.”

Lucie Pinson

at franceinfo

Is there still a boom in sustainable finance?

Yes, in the sense that there are more and more financial products labeled green, sustainable, responsible, which make it possible to support the financing of renewable energies, or other projects which are good for the transition. That’s not the problem. The problem is that this financing complements the financing of fossil fuels which continue to aggravate climate change, and in particular the increase in greenhouse gas emissions. We must understand that a transition does not mean adding green to an ocean of polluting activities. It is about getting out of polluting activities, gradually but now, to move exclusively towards green activities. Sustainable finance cannot be sustainable if it only complements the financing offer for fossil fuels.