BNP Paribas steps up climate commitment
A few days ahead of Climate Finance Day, in Paris on 29 November, financial institutions are gearing up their publicity around this theme. BNP Paribas, for example, has just announced that it will no longer have any exposure to thermal coal by 2030 in the European Union and by 2040 worldwide. Since 2017, BNPP has no longer directly financed new coal-fired power plant projects. “In 2018, the share of coal in the electricity mix of BNPP-financed power companies for the first time fell below 20%, vs. 38% worldwide”, it said.
This restriction applies not only to the financing of power plants but also to general lending to power producers still using coal. BNPP will thus review whether the transition policies of power companies using coal are compatibles with these targets and, if not, it will terminate business relations with them. This has already happened, for example, with power producers in Poland. However, “we always try to maintain a dialogue with our clients, given that if we were forced to no longer work with them because they didn’t meet coal-withdrawal objectives that are compatible with our own, we would no longer have any influence over them. And we have noticed that, unfortunately, in these cases, the deals that we exclude are often taken up by others”, says Laurence Pessez, head of CSR at BNP Paribas.
Meanwhile, BNPP announced that it was raising its targets on financing renewable energies to €18bn by 2021, as it has already surpassed its previous, 2020 target of €15bn since December 2018. “All the bank’s business lines should be focused on these targets”, Pessez said. Raising financing levels for renewable energies requires, for example, not only a mobilisation of our sales reps, but also our risk-management teams. The reason for this is that all large projects are already funded. We are therefore having to address the funding needs of smaller projects in more varied countries than previously and whose risks must be carefully assessed.”