European banks risk jeopardizing the path to net-zero carbon emissions and the growth of renewable energy unless they stop directly financing new oil and gas fields this year, investors managing assets worth more than $1.5 trillion said on Friday.
ShareAction said it had made the demand in letters sent to the heads of Barclays, BNP Paribas, Credit Agricole, Deutsche Bank, and Societe Generale.
The responsible investment group, which is coordinating the letters, said the investor signatories include Aegon Asset Management, La Francaise Asset Management, and Britain’s Local Government Pension Scheme.
ShareAction said the five banks it had contacted and Britain’s HSBC rank as the largest European financiers of the top oil and gas companies expanding production between 2016 and 2021.
However, HSBC said in December that it would stop directly financing new oil and gas fields, joining other banks restricting asset financing, ShareAction noted.
“Investors are putting these banks on notice that they will face ever-increasing pressure if they don’t act soon to reverse their financing of new oil and gas,” said ShareAction’s Jeanne Martin.
A Barclays spokesperson said the bank believed it could make the greatest difference by working with customers and clients as they transition to a low-carbon economy.
“This includes many oil and gas companies that are actively engaged and critical to the transition,” the spokesperson said, adding that Barclays was lowering its financed emissions from energy.
BNP Paribas said in an email that it had announced new targets last month to “accelerate the transition to a low-carbon economy”, including ending financing of new oil and gas exploration and production and cutting gas exposure.
Credit Agricole said it had already ended financing of new oil extraction projects and that it had a plan to reach carbon neutrality by 2050.
Societe Generale declined to comment, but a spokesperson said the bank would assess the letter once its executives had received a copy. The spokesperson pointed to the French bank’s targets to reduce exposure to oil and gas production by 2025.
Deutsche Bank said it had “significantly reduced” its engagement in carbon-intensive sectors since 2016 and had agreed targets for reducing financed emissions by 2030 and by 2050.
“We are focused on supporting our customers in their transformation towards becoming carbon neutral,” the bank said in an emailed statement.
Although banks have been tightening their lending criteria for fossil fuels as part of pledges to cut financed carbon emissions to zero by 2050, environmental groups say they are doing too little, too late.
The International Energy Agency said in 2021 that investment in new oil, gas and coal supply projects must be halted to achieve net-zero emissions by mid-century.