European investment giant BNP Paribas this week announced a global financing policy that no longer will include doing business with companies whose principal activity is the “exploration, production, distribution, marketing or trading of oil and gas from shale and/or oil from tar sands.”
The Paris-based banker also will cease financing projects that primarily transport/export oil and gas from shale or oilsands, such as liquefied natural gas terminals.
BNP plans “no business relations” with companies that derive most of their revenue from the oil and gas activities. Pipelines that primarily transport from shale and/or oilsands would not be financed, nor would funding be provided for exploration and production activity in the Arctic region.
"We’re a long-standing partner to the energy sector and we’re determined to support the transition to a more sustainable world,” said CEO Jean-Laurent Bonnafe. “As an international bank, our role is to help drive the energy transition and contribute to the decarbonization of the economy.”
According to a report by the Rainforest Action Network and other groups, BNP last year financed an estimated $1.94 billion for oil and ga projects, which ranked it 17th among international banks. In 2014, it spent an estimated $3.74 billion for oil and gas-related investments.
These decisions to end fossil fuel investments “mean that we will cease providing finance to a number of companies and organizations that are not making an effort to be part of the transition to a less greenhouse gas-emitting economy,” Bonnafe said. “Going forward, we will agree to finance only those energy sector companies that are pursuing a policy of diversifying their energy sources.”
BNP’s new measures complement previous decisions to reduce support for coal mines and coal-fired power generation. The financial firm previously made a commitment to increase total financing for renewable energy to $17.7 billion by 2020, with millions more directed to “innovative solutions” for energy transition.
“As we have announced, we’re committed to working with and supporting those energy sector partners who have decided to make environmental issues a central part of their business policy,” Bonnafe said.
BNP’s commitment is in line with an International Energy Agency scenario, which aims to keep global warming below 2 C by the end of the century.
“To achieve this goal, the world must reduce its dependence on fossil fuels, starting with oil and gas from shale and oil from tar sands whose extraction and production emits high levels of greenhouse gases and has harmful effects on the environment,” it said.
BNP has a presence in 74 countries, with more than 192,000 employees, including more than 146,000 in Europe. In its corporate/institutional banking and international financial services activities, BNP holds top positions in Europe, a strong presence in the Americas and a growing business in Asia-Pacific.