France’s largest bank under pressure to stop financing the development of fossil fuels

NGOs which previously took the French government to court have taken steps towards a lawsuit against the bank, the world’s leading financer of oil and gas majors. Stéphane Mandard discusses latest developments in an article on the English section of the Le Monde website.


BNP Paribas warned to stop financing fossil fuels and ‘climate chaos’

After l’Affaire du Siècle (“case of the century,” a historic case launched by four major NGOs in 2018 aimed at prosecuting the French State for inaction against global warming), will there now be l’Affaire du BNP Paribas? NGOs Notre Affaire à Tous and Oxfam France, which helped to bring the French government to justice for its lack of action over climate change, now intend to initiate the “trial of a financer of climate chaos.” A first milestone was reached on Wednesday, October 26. The NGOs, joined by Friends of the Earth, formally served notice on France’s leading bank to stop supporting the development of fossil fuels, Le Monde has learned.

They cite the law on the duty of care, which obliges large French companies to identify risks and prevent serious environmental and human rights violations that may result from their activities. In this case, the activist groups accuse BNP Paribas of not applying the law in the area of climate change, by continuing to finance oil and gas projects. They have set an ultimatum for the banking group: It has three months to “comply with the law.” If it fails to do so, the associations will refer the matter to the Paris court. This would be the “first climate litigation in the world” involving a commercial bank. So far, states (both France and the Netherlands) and oil groups (Shell) have been convicted.

“BNP Paribas is responsible for the climate crisis, because it finances fossil fuels. Since the Paris agreement [on the climate, concluded in December 2015, at COP21], despite its great promises, the leading French bank has still not turned off the tap,” said Cécile Duflot, executive director of Oxfam France and former political party leader of the Greens. “We are convinced that the courts will help us put an end to a hypocrisy that is on its way to becoming fatal.”

Why target BNP Paribas rather than another bank? This is due to the fact that it is the “world’s leading financer of the majors in the sector,” said Lorette Philippot, a specialist in climate and financial issues at Friends of the Earth. Between 2016 (after the Paris agreement was reached) and 2021, the group injected more than $43 billion (€43.4 billion) into the eight major European and American oil and gas companies.

‘Climate bombs’

No other bank in the world has invested as much over this period, according to data compiled in the 2022 edition of Banking on Climate Chaos, a benchmark report led by a dozen NGOs, including Reclaim Finance. American banks City and J.P. Morgan Chase, second and third in this ranking, “only” injected $36 billion over the same period. By comparison, France’s Crédit Agricole and Société Générale rank ninth and tenth, with $15 billion and $13 billion respectively. BNP Paribas is the leading lender to BP and Shell and the major financer of six other giants: TotalEnergies, Chevron, ExxonMobil, ENI, Repsol and Equinor.

By investing in these polluting companies through loans or share or bond issues, the French financial group has placed its “finger on the detonator of climate bombs,” said Ms. Philippot. The oil companies supported by BNP Paribas are involved in more than 200 new fossil fuel projects identified as potential “climate bombs” by the Oil Change International network. If completed, these projects could result in the emission of an additional 8.6 gigatons of CO2 (the equivalent of the emissions from 77 new coal-fired power stations over their lifetime). This would put a serious dent in the Paris Agreement’s goals aimed at keeping warming below 1.5°C.

Among them is TotalEnergies’ Tilenga/EACOP megaproject. This involves drilling more than 400 wells in Uganda, a third of which will be in a protected natural park, and building the world’s longest heated pipeline (1,445 kilometers) to carry the equivalent of 200,000 barrels per day to the Tanzanian coast. This controversial project, which could contribute to the emission of more than 30 million metric tons of CO2 per year and the expropriation of 100,000 people, has earned TotalEnergies the distinction of being the first company to be sued for breach of duty of care. The trial, originally scheduled for October 12, has been postponed to December.

The French bank has invested more than any other in Arctic oil and gas expansion: nearly $6 billion between 2016 and 2021. More than three times as much as Crédit Agricole.

BNP Paribas, like other French banks, has committed to not participating directly in the financing of the Tilenga/EACOP project in 2021. However, the group remains TotalEnergies’ second largest financer, behind Crédit Agricole. In May 2022, BNP Paribas participated (along with Crédit Agricole and Société Générale) in an $8 billion loan to the French oil company, the largest financial support received by the French major since the Paris Agreement.

BNP Paribas is also the world’s leading investor in sectors that are booming despite the threats they pose to ecosystems and biodiversity. The French bank has invested more than any other in Arctic oil and gas expansion: nearly $6 billion between 2016 and 2021. More than three times as much as Crédit Agricole. With $36 billion over the same period, it is also the world’s leading financer of offshore oil and gas development, ahead of the American bank J.P. Morgan Chase ($35 billion) and well ahead of the French banks Société Générale (8th, with $17 billion) and Crédit Agricole (13th, $12 billion).

‘In-depth transformation’

In total, adding in support for coal, BNP Paribas is the leading European financer and fifth worldwide (behind four American institutions) of fossil fuel development, with $55 billion in financing granted between 2016 and 2021, according to the latest “Banking on Climate Chaos” report. Again, it outranks Société Générale and Crédit Agricole, 16th and 17th in this ranking with €33 billion and €32 billion respectively.

“For more than 10 years, we have decided to contribute to the fight against climate change,” said BNP Paribas. The bank said it is “committed to an in-depth transformation to align its activities with the objectives of the Paris Agreement.” Like other major banks, it joined the Net-Zero Banking Alliance in 2021, an initiative led by the United Nations Environment Program, in order to “redirect” financial flows towards a “decarbonized economy” by 2050. This is a tall order: In 2020, the carbon footprint of France’s leading bank was estimated at around 750 million metric tons of CO2, a figure greater than all of France’s territorial emissions, according to a report by Oxfam, published in 2021.

The bank released its first “Climate Analysis and Alignment Report” in March. It set targets to be achieved by 2025, including the reduction of lending in oil and gas production activities by 12% compared with 2020. This is expected to reduce CO2 emissions linked to this finance by “at least 10%.” However, this commitment does not apply to oil and gas pipelines, nor does it apply to its investments in financial markets. Moreover, the bank does not specify where it stands on this trajectory. The same uncertainty applies to the trajectory concerning electricity production. The bank aims to increase the share of renewable energies in the energy mix it finances by more than 66% in order to reduce its carbon footprint by “at least 30%.”

As with l’Affaire du Siècle, the lawsuit against BNP Paribas is accompanied by a major publicity campaign, sponsored by the French comedian Guillaume Meurice, centering on a video and a petition. L’Affaire du Siècle’s video and petition collected over 2 million signatures in less than a month. Will this record be broken?

BNP Paribas responds to being served notice

Contacted by Le Monde after being served notice to stop supporting fossil fuels, BNP Paribas said it “has not ceased to strengthen its commitment to reducing carbon emissions linked to its credits.” It added that it has notably “reduced its exposure to coal to a residual level” and “ceased all relations with specialists in unconventional hydrocarbons (oil and shale gas)”. The group asserts that it is “one of the world’s leading banks with the most ambitious targets for reducing oil financing”. BNP Paribas specified that it is the leading European bank for the support of all sectors of the economy and that “the gross figures mentioned sometimes have little meaning if they are not put into perspective with all its financing”. At the end of 2021, the energy sector (renewables and fossil fuels) represented “less than 4% of BNP Paribas’ loans” to the economy. “Oil and gas extraction and production and refining accounted for only 1.3%,” the bank added.

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