Climate: several NGOs denounce the hypocrisy of financial institutions

Posted January 17, 2023, 9:51 amUpdated on January 17, 2023 at 10:01 am.

No account yet. The biggest financial institutions that have joined coalitions to achieve carbon neutrality and adhere to the Paris Agreement continue to fund companies pursuing new oil and gas projects, nine NGOs denounced in a study published Tuesday.

Approximately 550 companies with an asset weight of US$150 trillion, or 40% of the global total, are members of the Glasgow Financial Alliance for Net Zero (Gfanz). It is divided into seven sectoral alliances that connect, for example, banks, insurers or asset managers.

“Business as usual” for most banks

“Between the date each bank joins the alliance and August 2022, the 56 largest members of the Banking Alliance for Carbon Neutrality [le NZBA est membre du Gfanz, NDLR] It brought $269 billion in loans and bond or equity issuances to 102 major mining energy producers,” highlights the research of NGOs Reclaim Finance, 350.org, BankTrack, Rainforest Action Network, Recommon, Urgewald, Friends of the Earth, Sierra Club. and stand on the ground.

“It’s business as usual for the majority of banks and investors who continue to support fossil fuel companies without restraint despite their high-profile commitments to carbon neutrality,” Lucie Pinson, founder and director, said in a press release. Restore finance. For him, this “greening is more harmful because it casts doubt on the sincerity of all net zero commitments and undermines the efforts of those who really act on climate”.

Citigroup and Bank of America are bad students

With $30.5 billion in funding since August 2022, the American Citigroup group is leading, followed by Bank of America ($22.8 billion) and Japan’s MUFG ($22.7 billion). French banks BNP Paribas, Société Générale, and Crédit Agricole are ranked 15th, 16th, and 17th, respectively, with $6-7 billion in funding. On the asset manager side, the alliance’s largest 58 members owned at least $847 billion in stocks and bonds in 201 gas and oil producers, the study found.

The problem is that “now there is an agreement [sur le fait qu’il] There is no place in the +1.5 degree scenario [d’ici à 2100 comparé à la période préindustrielle, NDLR] for a new supply of fossil fuels,” explained study author and Reclaim Finance analyst Paddy McCully during a press release.

Financial players regularly singled out for their support of the oil and gas sector often claim that their funding is contributing to the sector’s energy transition and funding the world as it is. Thus, financial institutions find themselves at a disadvantage between the old world and the new world.

The new “green” trend

For the most ambitious who have decided to make sustainable finance a competitive advantage, this is almost certainly good news. For the most hesitant, it starts to get complicated. It’s gotten to the point where, according to research from specialist consulting firm South Pole, more and more companies are now ‘greening’, which involves keeping their green commitments quiet for fear of being accused of ‘greenwashing’. For squeezers like Deutsche Bank, they are the first to suffer a backlash.

In France, the French Banking Federation (FBF) estimated in October that loans to fossil fuels accounted for just 25 billion euros, or 0.27% of banks’ total balance sheets. In contrast, financing of renewable energies and green and sustainable activities increased to more than 100 billion euros at the end of 2021. However, these figures are only estimates, and in the eyes of NGOs, they remain insufficient.

with AFP

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