Earlier this year, banks got a free pass from EU rules that would have helped stop them from investing in deforestation. Now it looks like they are about to pull off the same trick — largely thanks to pushback from the French government, Aurelie Skrobik writes.
ADVERTISEMENTAt COP28 in Dubai, French President Emmanuel Macron got the attention of those present with bombastic pledges, affirming that “these are not just nice words, France has a plan [...] to move away from fossil fuels and reduce its emissions”.
Yet, while he expounded how G7 countries ‘’must lead by example’’ and "private actors must also commit themselves’’, his emissaries in Brussels have been playing a very different game.
They have reportedly been working to secure a loophole in a new EU law that should prevent banks and other financial actors from funding projects tied to climate breakdown, environmental damage and human rights abuses.
In last year’s debates, a majority of European countries appeared to support the idea that banks should be covered by the Corporate Sustainability Due Diligence Directive, or CSDDD. At the last minute, France reportedly vetoed the rules for finance.
In recent weeks, as EU institutions negotiate the final law, France appears to have further hardened its stance.
According to leaked meeting minutes, it has refused to consider any of the proposed compromises or alternatives to a full exemption for the financial sector.
Their negotiating team recently confirmed to a major international outlet that “France supports the exclusion of the financial sector from the scope of the directive.”
So what is the financial system that Macron’s representatives are fighting so hard to protect?
Exasperation over funding climate breakdown
Europe’s banks have helped fossil fuel companies raise more than €1 trillion since the Paris climate agreement in 2016.
It doesn’t stop there. Just last month, Global Witness showed how European banks and investors, including Credit Agricole, Deutsche Bank, and Intesa Sanpaolo, are investing over €700 million in oil companies tied to brutal violence against civilians in South Sudan.
An apparently exasperated Macron himself summed up how the financial system funds climate breakdown last week, saying ‘’the private sector has no disincentive to finance coal and choose renewable energy."
"It's totally absurd. And so our private market, our investment system, is massively dysfunctional and it’s shocking for everyone’,’ he stated.
This week, this dysfunctional system looks set to get a green light from his own government.
Final negotiations on the CSDDD are expected to conclude sometime in the early hours of 14 December, and all signs point to the French government securing a carve-out for the financial sector.
Words coming from one's own mouth
This would mean, once again, a free pass on rules for what banks can invest in, and where the money from people’s pension funds ends up.
Earlier this year, banks were exempted from EU rules that would have helped stop them from bankrolling deforestation. This is more of the same.
The negotiating team from the European Parliament has a different stance and has not given up the fight, having dared to imagine a world in which people’s savings aren’t used to fund violent human rights abuses, environmental destruction and climate breakdown.
Empty words won’t keep fossil fuels in the ground. Cutting off the money pipeline to the companies digging them out will, but France appears hell-bent on keeping the taps on.
ADVERTISEMENTIt is now or never. An opportunity for the EU to pass a genuinely transformative climate law like this one won’t come around again soon, and if it does it will almost certainly be too late.
It is time for Macron to listen to his own words and end the absurd flow of money into fossil fuels once and for all.
Aurelie Skrobik is Corporate Accountability Campaigner at Global Witness.
At Euronews, we believe all views matter. Contact us at view@euronews.com to send pitches or submissions and be part of the conversation.
