Banks do not lose the desire to give credit to big oil despite the facade commitments to facilitate the green transition. L’International Energy Agency was clear: net zero means no new oil & gas projects. Yet, since 2016, the 50 largest European banks have provided over $ 400 billion in loans to the 50 largest companies specializing in oil & gas production and there are no signs of stopping. The latest research by the British NGO Share Action shows that HSBC, Barclays and BNP Paribas are the biggest culprits, providing respectively $ 59 million, $ 48 billion and $ 46 billion since 2016. Italy’s Unicredit (13, 59 billion) and Intesa Sanpaolo (11.83 billion) are close to the top ten.
Among the companies most financed by Unicredit and Intesa there is for both the compatriot ENI and the Russian Gazprom. After an increase in 2020, funding activity has dropped significantly in 2021, but remains consistent with pre-pandemic levels (2016-2019 average). 92 percent of the funding was in the form of general finance support for oil & gas companies, while only 8 percent of the funding was in the form of dedicated funding.
The Net Zero Banking Alliancelaunched four months ago and which brought together 40% of global lenders to facilitate emissions neutrality targets by 2050, has so far failed to have a strong impact.
Its members have provided at least $ 38 billion in funding to the top 50 oil and gas upstream expanders since its launch last April. Half of this was provided by four founding signatories: Barclays, BNP Paribas, Deutsche Bank and HSBC. Only a handful of banks restrict funding to oil and gas projects, and fewer still restrict funding to companies expanding oil and gas capacity. The banks say they want to help with the transition, but they don’t ask the funded companies for specific plans to do so and they don’t make it clear that there shouldn’t be room for oil and gas expansion in these plans. Solo Commerzbank, Crédit Mutuel, Danske Bank, La Banque Postale and NatWest they have started to limit funding for oil and gas projects.
Commerzbank, Credit Mutuel and La Banque Postale have also pledged to limit funding even though this only applies to new customers in the case of Commerzbank. France’s Banque Postale has created an important precedent by announcing its exit from the oil and gas sector by 2030 and will no longer finance oil and gas projects and companies if they have not committed to phasing out their oil and gas operations by 2040; it also requires that they do not develop new oil & gas projects, in line with the IEA guidelines.