BREAKING NEWS

BREAKING NEWS

Which European banks do the most to stop climate change?

Now Reading:

Which European banks do the most to stop climate change?

Which European banks do the most to stop climate change?
@ Copyright :
REUTERS/Ina Fassbender
Text size Aa Aa

Leading European banks have taken steps to reduce their financing of “extreme” fossil fuels that contribute to global climate change, according to a new report. The report especially highlights the Netherland's ING and France’s BNP Paribas as good options for environmentally conscious customers.

The report, Banking on Climate Change, by NGOs including BankTrack and the Rainforest Action Network, says many European banks have “realised the risks” of climate change and put policy restrictions on fossil fuel financing.

“Extreme” fossil fuels include those that contribute the most to climate change, such as tar sands, oil extracted from the Arctic and ultra-deepwater, liquefied natural gas exports, and coal.

“Across the board, the majority of the 14 European banks we assessed have reduced their financing for ‘extreme’ fossil fuels in 2017,” BankTrack climate campaigner Greig Aitken told Euronews.

The leaders

In June 2017, ING showed its commitment to ending financing for the production and transport of carbon-heavy tar sand by saying it would not fund any of Canada’s major pipeline projects, including Keystone XL and Line 3.

“Processing oil sands is known to be energy intensive, producing significant greenhouse gas emissions. This is in addition to potential social impacts, such as on the local native tribes historically using the land,” the bank said at the time.

Later in the year the bank announced it would phase out lending to any utility with more than five percent of its power coming from coal.

Meanwhile, France’s biggest listed bank, BNP Paribas, said in October it would no longer work with companies that primarily do business in shale or oil sands, or finance projects focused on the transportation of oil and gas from them.

“We’re a long-standing partner to the energy sector and we’re determined to support the transition to a more sustainable world,” BNP Paribas Chief Executive Jean-Laurent Bonnafe said in a statement.

But while the two banks have made significant steps, Aitken said most European institutions assessed in the report had made only “marginal drops” to their fossil fuel financing instead of the “sharp reductions” that should be made if they are committed to the Paris Agreement on climate change.

“There is clearly a good deal of understanding within European banks of the stark climate change challenge we are facing, and there are indications of intent to do better.

“That said, the message is still not getting through to the deal-makers focused on profit rather than the planet, who are still signing off on billions of dollars worth of climate-busting investments,” he said.

The worst offenders

Three major European banks - HSBC, Credit Suisse and Standard Chartered - increased their “extreme” fossil fuel financing in 2017 by $2.6 billion (€2.1 billion), $1.1 billion, and $643 million respectively placing them among the 10 worst climate offenders in the world, according to the report.

While the report found progress in Europe overall, Aitken noted that there was an increase of $2 billion in coal financing by the European banks collectively in 2017.

Of all the banks assessed, HSBC provided the most money to "extreme" fossil fuels between 2015 and 2017, followed by Barclays and Deutsche Bank.

In statements to Euronews, lower ranking banks in the report insisted that they were committed to ending climate change.

HSBC, which Aitken described as the “biggest culprit” in Europe, said it was “committed to an orderly transition to a low carbon world and amongst other commitments, has pledged to provide $100 billion in sustainable financing and investment by 2025”.

“The shift to a low carbon economy is a challenge, but HSBC is committed to being a leading global partner to the public and private sectors as they make that transition.”

Credit Suisse said it had introduced restrictions on coal mining and supported clean and renewable energy businesses.

It said the increase in its financing of “extreme” fossil fuels was a reflection of changes in the broader coal mining sector, which were in a better position to tap the capital markets last year than during economic challenges in 2016.

Standard Chartered also said it has restrictions on new coal mining projects, and had introduced standards for coal-fired power plants.

It questioned the report’s methodology, arguing that the bank does not have exposure to tar sands or Arctic oil.

What next?

Going forward, Aitken said commitment shown in restricting financing for coal mining and power should be stepped up by banks and lead to exiting the sector altogether.

“The policy progress we’ve seen on coal finance also needs to be urgently stepped up across other fossil fuel sectors, in which the majority of European banks remain deeply entrenched,” he said.