Written by: Kimberly White
BNP Paribas is accelerating its timeline for a complete coal phase-out.
In 2019, the bank announced its 2030 target cut-off date for countries in the EU. BNP Paribas is now expanding its target date to end the use of coal by its electricity-producing customers to OECD countries.
The French bank shared that it will no longer accept new customers whose share of coal-related revenue exceeds 25 percent and will continue its “commitment to end, in the near future, relations with any customer developing new coal-based production capacity.”
The firm added that the implementation of its newly expanded policy would lead to a swift reduction of approximately half of the companies producing electricity from coal among the bank’s customers.
Remaining customers either have a coal phase-out plan aligned with the Paris Agreement or have plans BNP Paribas believes will align with it in the near future.
“For almost 10 years our policies have attested to our commitment to be a major international bank that is particularly advanced with regard to the energy transition. BNP Paribas is the first bank in the world that has set a coal-exit date, decided to end the financing of shale-gas and tar-sands specialists, and acquired a leading position in financing renewable-electricity projects,” said Jean-Laurent Bonnafé, Director and Chief Executive Officer of the BNP Paribas Group. “Beyond coal and unconventional hydrocarbons, we are putting in place innovative tools that will enable us to systematically introduce environmental criteria into our lending decisions and align our portfolio with the objectives of the Paris Agreement.”
Thirty-five global banks are responsible for $2.7 trillion in fossil fuel financing since the adoption of the Paris Climate Accord. Despite the bank’s climate commitments, Rainforest Action Network reported that BNP Paribas became the largest banker of fossil fuels in Europe last year.
While it has been reported that BNP Paribas doubled its funding of coal power and coal mining, the bank states it has not “financed a single new coal-fired power-plant project anywhere in the world and does not advise on the purchase or sale of such assets.”
While the new policy represents progress for BNP Paribas, environmental groups fear that the policy lacks the ambition needed and is a “missed opportunity to commit to a full coal phase-out and to adopt measures to push all companies in its portfolios to close their coal infrastructure.”
“The absence of any strict exclusion criteria beyond coal plant developers shows the difficulty for BNP Paribas to definitively cut its ties with some big players in the sector. The bank plans to publish the details of its commitments in a future updated sector policy,” said Lucie Pinson, Founder and Director of Reclaim Finance, an organization that aims to create a financial system that supports the transition to sustainable societies that both preserve ecosystems and meet people’s basic needs.
“To remove any doubt, the group must build on the good practices from AXA and Crédit Agricole and specify in that policy strict exclusion criteria for existing clients highly exposed to coal, and require other companies to adopt by next year a public and detailed closure plan of their coal infrastructures,” continued Pinson.