BNP Paribas SA is imposing new financial restrictions as part of an updated policy on how to treat clients in the mining industry.
The European Union’s largest bank will no longer provide financing to projects dedicated to extracting metallurgical coal, according to an emailed statement late Wednesday.
“This new commitment is part of BNP Paribas’ efforts to align its credit portfolio in the steel sector with its net zero commitment,” the bank said in the email. The decision follows from objectives announced by the bank, which aim to reduce the bank. intensity of carbon emissions financed through oil and gas, power generation, automobile, steel, aluminum and cement, it said.
BNP has made access to financing increasingly difficult for customers with large carbon footprints as it faces an increasingly challenging regulatory and activist environment. The lender remains the subject of a major lawsuit by non-profit organizations that claim it is not meeting its environmental obligations under French law.
“BNP Paribas recalls that from 2020 it is committed to a path to a complete exit from the financing of the entire value chain of companies linked to thermal coal until 2030 in Europe and in the OECD countries, and until 2040 in the rest of the countries. world,” the bank said.
At the same time, BNP surpassed its peers to become the largest provider of bonds for green projects, according to data compiled by Bloomberg.
The developments coincided with new demands in Europe. The European Central Bank has warned about 20 lenders that it will impose fines unless they address shortcomings in their climate risk management, Bloomberg reported Wednesday. And last month, the European Banking Authority said it was reviewing the framework that sets industry-wide capital requirements to better incorporate ESG, and warned lenders they will have to adjust the risk assessments they make of their customers.
BNP’s announcement comes as climate activists increasingly name and shame financial firms that support expansion in the fossil fuel industry. A report published on Thursday by French non-profit Reclaim Finance said that since 2016, after the signing of the Paris climate agreement, the world’s largest banks have provided 557 billion dollars in finance to the 50 largest developers in the metallurgical sector.
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Updated: 23 Nov 2023, 17:53 IST
(tagsTranslate)BNP Paribas