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As part of efforts to support energy transition, France’s biggest listed bank, BNP Paribas, said on Wednesday that it would no longer do business with companies whose main business is exploration, production, trading, or marketing of oil and gas from shale or tar sands projects.
In one of the latest signs that the banking industry is evaluating the wisdom of doing business with the oil and gas industry in the face of mounting pressure from investors, BNP Paribas also said that it wouldn’t finance any oil or gas exploration or production projects in the Arctic region.
The bank will also no longer finance LNG terminals that predominantly liquefy and export gas from shale projects, and choke off funding for pipelines that carry oil and gas from shale and/or tar sands.
It doesn’t stop there. BNP Paribas won’t finance coal mines and coal-fired power plants either, and will be no longer support coal companies that are not pursuing a policy of diversifying their energy sources.
“BNP Paribas will continue to actively support clients in the energy sector who are committed to being part of the energy transition,” the bank said.
The lender is targeting an increase in its total financing for renewables to US$17.7 billion (15 billion euro) by 2020, and invest US$118 million (100 million euro) in start-ups working on innovative solutions for energy transition such as energy storage and energy efficiency.
“BNP Paribas is committed to bringing its financing and investment activities in line with the International Energy Agency (IEA) scenario, which aims to keep global warming below 2°C by the end of the century. To achieve this goal, the world must reduce its dependence on fossil fuels, starting with oil and gas from shale and oil from tar sands whose extraction and production emits high levels of greenhouse gases and has harmful effects on the environment,” BNP Paribas said.
Related: Oil Giants At Odds As Saudi, Russian Ties Improve
“We’re a long-standing partner to the energy sector and we’re determined to support the transition to a more sustainable world. As an international bank, our role is to help drive the energy transition and contribute to the decarbonisation of the economy,” said BNP Paribas chief executive Jean-Laurent Bonnafé.
Another France-based bank, Societe Generale, said last year that it was stepping up support for renewable projects, and stopped financing coal-fueled power plants or related infrastructure anywhere in the world.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.