The NGOs claim BNP Paribas has a duty to end all direct support for new oil and gas projects. Image: Getty Images
Three non-profits are suing BNP Paribas for taking insufficient action to end fossil fuel financing, though the bank insists its strategy of reducing oil and gas exposure is ‘largely on track’. Philippa Nuttall reports.
Three non-governmental organisations are suing BNP Paribas, France’s biggest bank, for failing to comply with the country’s duty of vigilance law and for taking insufficient action to end fossil fuel financing. The case is the world’s first climate lawsuit against a commercial bank.
BNP Paribas insists it is exiting from fossil fuels and says it “regrets” the decision by Friends of the Earth, Oxfam France and Notre Affaire à Tous “to engage in litigation rather than dialogue”.
On October 26, 2022, the three NGOs gave formal notice to BNP Paribas asking it to comply with due diligence obligations under France’s Corporate Duty of Vigilance Law, which requires large companies to identify and prevent risks to human rights and the environment. On February 23, the civil society organisations said BNP Paribas had failed to comply with its obligations and filed a lawsuit against the bank with the Paris Judicial Court.
“The urgent warning professed by the scientific community and the International Energy Agency has been reiterated through repeated statements from the UN: a bank cannot claim to be committed to net zero while supporting new oil and gas projects,” Friends of the Earth France campaigner Lorette Philippot said in a statement.
“BNP Paribas, Europe’s largest funder of fossil fuel expansion, is ignoring scientific truths and is reluctant to address this glaring issue,” she added.
In a statement sent to Sustainable Views, a sister publication of The Banker, the bank insisted it was “convinced the ecological transition is the only viable path for the future of our economies” and that it was “focused on our fossil fuel exit path, accelerating financing for renewable energies and supporting our customers”.
“Approximately 10 years ago, 95% of our outstanding financing for energy production financed fossil energy projects,” BNP Paribas said.
“Today, more than half of our financing for energy production is oriented towards low-carbon energies. By 2030, BNP Paribas will have transitioned its financing activities to low-carbon energy production by more than 80%.”
The bank described its exit from fossil fuels as “largely on track”, with “only residual” remaining exposure to coal, and cited its January 2023 decision to reduce exposure to oil and gas.
By 2030, it plans to only retain oil loans still to be amortised, worth less than €1bn, to reduce gas production financing by 30% and to “focus on supply and low-emission power plants, in line with the European taxonomy, which considers gas has a role to play in the ecological transition under certain conditions”, it said.
The NGOs insist BNP Paribas has a duty to end all direct support for new oil and gas projects, citing the bank as the world’s largest funder of the eight European and North American oil and gas majors, which together are involved in more than 200 new fossil fuel projects worldwide.
The Paris Judicial Court will propose a schedule for the next steps in the proceedings.
François de Cambiaire, a partner at Seattle Avocats, which is working on the case with the NGOs, said the court’s judgment will rely on UN and OECD due diligence guidelines and that outcomes “can go as far as the cessation of the activity causing the damage, and even divestment”.
This article was first published in Sustainable Views, a sister publication of The Banker.
