The NGO coalition Banking on Climate Chaos publishes, Thursday, its new report on the financing by banks of oil, coal and gas companies.
In 2022, the world’s major banks continued to pay hundreds of billions of dollars to producers of fossil fuels, the main cause of global warming. This is what denounced, Thursday, April 13, the NGOs of the Banking on Climate Chaos coalition (“bet on climate chaos”), which brings together associations fighting against climate change, in a new report.
According to their calculations, made from financial information bases such as Bloomberg, the 60 main global banking institutions have paid a total of 673 billion dollars (616 billion euros) to companies such as Saudi Aramco, ExxonMobil or TotalEnergies, three oil companies. A significant part of this funding – 150 billion dollars (136 billion euros) – even went to companies that continue to launch new coal, oil or gas projects.
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“Our objective is to alert to the gap between promises and practices. There is nothing more serious than to think that the situation is in good hands and that finance will save us”, explains to franceinfo Lucie Pinson, director of the NGO Reclaim Finance, member of the coalition. In 2021, the big banks had committed, via the “Net Zero Banking Alliance”, to achieving carbon neutrality for their portfolios by 2050.
A falling number
This figure of 673 billion dollars is however down from last year (801 billion dollars). “It’s too early to say if it’s encouraging. We’ve seen yo-yo effects in previous years”believes Lucie Pinson.
According to her, this decrease can be explained by the “superprofits” achieved in 2022 by companies in the sector, which had less need to raise funds. She fears that the level of funding for fossil fuels will rebound this year. “We have already seen large transactions since January. It is possible that 2023 will show an increase to compensate for what was not paid in 2022”continues the activist.
A French bank in 11th position
At the top of this 2022 ranking, the Royal Bank of Canada, with 42.1 billion, just ahead of JP Morgan Chase (39.2 billion). The American bank, however, remains the one that has financed fossil fuels the most since 2016 and the Paris agreement, this central treaty in the fight against global warming signed in November 2015.
The leading French bank, BNP Paribas, is in 11th place in the 2016-2022 ranking. Société Générale ranks 21st, just ahead of Crédit Agricole (23rd). Conversely, Crédit Mutuel (59th) and Banque Postale (60th) are the two establishments to have financed fossil fuels the least since 2016, respectively up to 0.5 and 0.4 billion dollars.
Contacted by franceinfo, BNP Paribas denounces the “numerous errors and methodological biases” of the report and disputes the increase displayed between 2021 and 2022 (from 16.5 billion to 20 billion dollars), estimating that “5.6 billion dollars are wrongly attributed to him”. It claims to have reduced the exposure of its loans to oil and gas exploration and production between 2020 and 2022. “This reduction in BNP Paribas loans to fossil fuels occurred even before the entry into force of the decisions announced [sur ce sujet par l’entreprise] on January 24, 2023, which will mark a very strong acceleration in the exit trajectory from fossil fuels”continues the bank, which claims to have “one of the most advanced fossil fuel funding reduction policies in the world”.
“French leadership is definitely buried”
Arguments that do not convince Lucie Pinson. “This report acknowledges that French leadership is definitely buried. Crédit Mutuel has watered down its commitment to no longer support the expansion of oil and gas [comme l’explique Reclaim Finance]while BNP Paribas and Crédit Agricole are among the few banks that have increased their fossil fuel financing in the past year”underlines the activist, regretting “the deafening silence of the French government” about this question.
Contacted, Crédit Agricole defends a “trajectory (…) demanding and responsible” : “brutally stopping the financing of fossil fuels would only quickly ‘green’ our balance sheet, but would not green the whole economy”, explains the bank. For its part, Crédit Mutuel promises to“stop financing, as of July 2024, companies in the energy sector that continue to develop new oil and gas exploration and production projects”.
Since 2021, the International Energy Agency (IEA), an agency created after the 1973 oil shock to secure the energy supply, repeats regularly that it is not it is not necessary to launch new gas, coal or oil exploitation projects to achieve the energy transition. In its latest report, the Intergovernmental Panel on Climate Change (IPCC) observed that “public and private funding for fossil fuels is always more important than that for mitigation and adaptation to climate change”.