European banks are once again under scrutiny. A report published Thursday by the NGO Reclaim Finance reveals that since 2021, these institutions have participated in nearly a thousand transactions supporting companies in the oil and gas sector. This analysis, which covers 20 major banks, shows a sustained involvement of banking groups in financing major players in the fossil fuel industry, such as TotalEnergies, Shell, and BP.
Among the financial institutions most involved in these transactions are Société Générale and the BPCE group, known for comprising Banques populaires and Caisses d’épargne as well as certain branches of Natixis. The NGO highlights that these banks stand out this year for their participation in bond issues for companies involved in oil and gas extraction.
Financing at the Expense of Renewable Energies
Reclaim Finance points out that although banks often highlight their commitments to energy transition, the majority of their financing continues to focus on their clients’ fossil fuel activities. According to the NGO, these investments are not aimed at renewable energies but rather maintain hydrocarbon-related operations, despite some of these financial groups’ stated decarbonization goals.
In response to these accusations, Société Générale claims to have reduced its exposure to the oil and gas industries by more than 50% compared to 2019. In its statement, the French bank asserts that its goal of reducing fossil fuel financing is ambitious and part of its roadmap for decarbonization.
The Persistent Role of Fossil Fuels
The BPCE group, for its part, justified its choices by highlighting a “selective” approach to its financing, which supposedly takes into account the transition plans of supported companies. According to BPCE, the growing demand for fossil fuels partly justifies their involvement, as renewable energies still cannot fully replace hydrocarbons in the current global energy mix.
However, the argument of a transition phase put forward by the banks is failing to convince NGOs. They believe that such financing further delays the phase-out of fossil fuels in Europe and hinders international efforts to combat climate change.
A Call for Immediate Measures
Reclaim Finance, supported by other NGOs such as Climate Action Network and WWF Europe, has directly addressed the leaders of several banks involved. In letters sent notably to BPCE and Société Générale executives, the NGO urges them to “urgently adopt the necessary measures to prevent fossil fuel expansion.” This call aims to obtain concrete and immediate commitments to finance clean energy, as banks are accused of maintaining strong ties to the fossil fuel sector.
The report also sheds light on these institutions’ insufficient policies regarding liquefied natural gas (LNG). According to Reclaim Finance, financing related to LNG infrastructure, including terminals, remains largely overlooked in the banks’ declared decarbonization goals.
