Thirty investors, coordinated by ShareAction and representing over US$1.5tn in assets under management, have written a letter to leading banks, including Barclays, BNP Paribas, Crédit Agricole, Deutsche Bank and Societe Generale, urging them to stop direct financing new oil and gas fields by the end of this year.
The investors, who include Candriam, La Française Asset Management, and Brunel Pension Partnership, among others, expressed concern that new oil & gas fields may jeopardize the global path to net zero. The investors also warned that these activities were holding back the renewable energy revolution in Europe, which they said was more important than ever as the continent battles with uncertain energy supplies in the wake of Russia’s invasion of Ukraine.
The letter adds that asset financing for new oil and gas represent only eight per cent of total funding to top oil and gas expanders. Hence, banks should focus on the companies behind these new oil and gas fields. Jeanne Martin, head of the banking programme at ShareAction, said, “banks must stop directly financing and also turn their attention to the companies that are enabling new oil & gas fields from being discovered and developed”.
ShareAction’s latest survey of European banks’ climate and biodiversity practices by now shows that European banks have taken only timid action to cease new oil and gas activities at the corporate level. However, recently some banks have started a movement towards the cause. For example, HSBC, which has an influential position as Europe’s largest bank and its largest financier of top oil and gas expanders, announced last December that it would no longer directly finance new oil and gas fields.
Sophie Deleuze, Lead ESG Analyst, Engagement & Vote at Candriam, said, “HSBC’s decision to stop financing new oil and gas fields is a direct result of strong, collaborative engagement from investors. We look forward to further positive outcomes from our discussions with other European banks that still finance new oil and gas projects.”
Anders Schelde, CIO of Akademiker Pension, said, “Stopping direct financing of new oil and gas fields is an absolute minimum to expect from banks that proclaim to have a green profile.”
Karin Nemec, CEO of Grünfin Group, said, “Obtaining our energy from clean sources is critical for both protecting the environment and national security. Banks must act now.”