…Joins league of big time lenders committed to energy transition by vowing to end oil, gas financing
French bank, BNP Paribas, has announced the decision to reduce lending to the oil and gas industry by 80% by 2030 as part of entering a new phase in its decarbonization efforts.
The bank’s announcement is the latest in a string of similar announcements from large lenders as they rush to declare their commitment to the energy transition by vowing an end to financing oil, gas, and coal production.
In a press release, the bank reported it had already stopped lending to new oil projects in 2016 and planned to reduce current funding for oil production by 25% by next year. It would also exit coal, with the process to be finalized by 2030.
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The bank also claimed that its outstanding loans for low-carbon energy projects were about 20% higher than its exposure to fossil fuels, having topped 28 billion Euros last September.
Reuters said there is virtually no large international bank left in the world that has not made such a commitment, yet up until now, at least, there has been little substance behind the declarations.
The amount of money banks are putting into renewable energy has changed little over the past six years, Reuters reported Tuesday, citing a report commissioned by several environmentalist nonprofits, including the Sierra Club and Fair Finance International.
Bank loans and bond underwriting for renewable energy businesses since 2016 has averaged 7% of a total $2.5 trillion in loans and bond underwritings for the energy industry as a whole, the report found
The reason for this was that although the amount of money poured into renewables increased over the period, so did the amount of money going into fossil fuels.
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“Banks’ financing to fossil fuels should be phasing out as financing to renewables increases drastically to have any chance of reaching the world’s – and their own – climate goals,” according to a researcher with Profundo – the entity that authored the report, Ward Warmerdam,.
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