European banks’ support for fossil fuel expansion blocks transition

In an open letter published today, several NGOs including Reclaim Finance, BankTrack, ReCommon and Urgewald are calling on banks to put in place stronger sector policies on oil and gas to ensure the transition. A crucial action because if 11 of the 20 banks have a policy ending the financing of new oil and gas projects (10), only four of them limit financing to companies developing these new projects (11).

The policies of European banks are even more insufficient on liquefied natural gas terminals, despite projections from the International Energy Agency (12). Ten banks have policies restricting the financing of LNG export terminals, only two of which have a complete exclusion (13), and only one has a policy restricting the financing of companies developing them (14).

Regarding French banks, BNP Paribas and Crédit Agricole declared that they would no longer participate in the conventional obligations of companies operating in oil and gas extraction (upstream). A visible commitment in practice: their number of transactions to upstream companies has dropped considerably with only 4 financings each in 2024. This makes Société Générale and Groupe BPCE the worst French students in this area, with 14 and 12 transactions respectively. .

On the other hand, the four French banks, including BNP Paribas and Crédit Agricole, have not taken any action on companies developing new oil-gas transport infrastructure (midstream), including LNG terminals. Crédit Agricole has participated in 42 transactions since January for midstream companies, Société Générale 38, the BPCE group 30 and BNP Paribas 18.

Worrying results given that from 2025, European banks will have to publish transition plans, including both their impact on the climate and their exposure to related risks. To ensure that these reports do not become a tool of greenwashing, Reclaim Finance is calling on regulators to make stopping funding for oil and gas expansion a strict criterion for transition plans, and to ensure that supervisors have the means to ensure compliance with this criterion.