Banks and fossil fuels, a (toxic) love story that dies hard

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Between the big global banks and fossil fuels, it is a story that has lasted since the very beginnings of these exploitations which we now know are harmful to the environment. And it is no exaggeration to assert that it is these banking organizations which have indirectly shaped the industries which exploit these fossil fuels, through sometimes colossal financing. Did you think that these banks had eased up on this financing over the years, in favor of advances in renewable energies? A recent report published on May 13, 2024 by a collective of several NGOs (Rainforest Action Network, Reclaim Finance, etc.) teaches us the opposite. Its authors looked at the practices of all the major global banks in this area. But we were more particularly interested in the actions of French establishments.

Image representing a bank stuck in oil

AI-generated image.

© Les Numériques

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14.2 billion euros in 2022

According to NGOs, who managed to obtain the figures for 2022, the main French banks continue to provide financial support to the oil, gas and coal industry, despite the urgency of the energy transition. Although French establishments have reduced the share of fossil fuels in their portfolios in recent years, they nevertheless remain involved in this sector which is a high producer of greenhouse gases.

In 2022, French banks have granted 14.2 billion euros in financing to the 100 largest fossil fuel operators in the world, placing themselves far ahead of their British (3.9 billion), Spanish (2.7 billion) or Italian (2.3 billion). BNP Paribas, Crédit Agricole and Société Générale are among the main providers of European funds in the oil and gas sector.

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Banks and fossil fuels, a (toxic) love story that dies hard

Commitments deemed insufficient

Under pressure from civil society, these major French banks have nevertheless increased their promises in recent years to reduce their support for fossil fuels. They have notably committed to achieving carbon neutrality in their portfolios by 2050 and have published decarbonization trajectories for the most emitting sectors such as oil and gas.

But for NGOs, these commitments have many limits and loopholes. The policies adopted by banks do not prevent them from continuing to finance companies developing new oil and gas projects. They also authorize the indirect financing of fossil fuel expansion via untargeted loans and bond issues.

Renewable energies not a priority

At the same time, French establishments highlight the strong growth in their “green” financing and their support for renewable energies. According to the French Banking Federation, banks' outstanding green and sustainable loans more than doubled between 2021 and 2022, to reach 216 billion euros. Their financing of renewable energies increased by 22% in one year, to more than 50 billion euros.

But for NGOs, this reorientation of financial flows remains insufficient given the scale of the investments that remain to be made to decarbonize the economy. Despite a decline in 2022, the world's major banks still provided $673 billion to companies active in fossil fuels that year, with a significant portion coming from French establishments.

Banks and fossil fuels, a (toxic) love story that dies hard

Stop financing fossil fuel expansion

To bring bank financing in line with the objectives of the Paris Agreements, civil society organizations are urging French and European banks to immediately cease any new financial support for the expansion of oil, gas and coal. They call for a massive reorientation of financing flows towards renewable energies, energy efficiency and other low-carbon solutions. According to them, only a rapid and complete exit from fossil fuels, starting with a cessation of exploration and development of new deposits, will make it possible to keep warming well below 2°C, and if possible at 1.5°C. C, in accordance with the commitments made by the international community in 2015.

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