Despite the International Energy Agency’s warning against new facilities in order to halt global warming, European banks are offering billions of dollars in loans to expand oil and gas production, according to research released on Monday.
According to ShareAction, a responsible investing non-profit, 25 of the region’s major banks combined provided $55 billion to energy businesses planning to boost oil and gas production last year.
Despite the fact that it was down from $106 billion in 2020 and $83 billion in 2019, it was still more than the $49 billion and $50 billion lent in 2018 and 2017 respectively.
According to an IEA analysis released in May, there should be no new oil and gas fields built in order to have a 50% probability of keeping global warming to 1.5 degrees Celsius above pre-industrial levels.
HSBC, Barclays, and BNP Paribas were among the largest providers of credit in 2021, despite 24 of the banks vowing to decarbonize their loan portfolios, according to the report.
ShareAction is urging investors to demand that banks establish policies restricting financing for oil and gas expansion and support climate-related shareholder motions at upcoming annual general meetings, according to ShareAction.
“Last year, shareholders were essential in pressuring banks to implement or enhance coal finance regulations,” said Kelly Shields, ShareAction’s Senior Officer for Banking Standards.
“They need to repeat that performance with oil and gas expansion this year,” Shields added.
On February 22, an HSBC spokeswoman said the bank was working with clients on the energy transition and would publish science-based targets to match oil and gas finance with the Paris Agreement’s goals and deadlines.
“Last year, shareholders were critical in forcing banks to enact or improve coal finance restrictions,” ShareAction’s Senior Officer for Banking Standards Kelly Shields said.
“With oil and gas expansion this year, they need to repeat that performance,” Shields added.
A spokeswoman for HSBC stated on February 22 that the bank was working with customers on the energy transition and would publish science-based targets to align oil and gas finance with the Paris Agreement’s goals and timeframes.
