BNP Paribas, criticized as one of the leading Western financiers of coal expansion, says it will cease all financing of the sector worldwide by 2040.
The Paris-based bank, and the French financial sector in general, is being pressured by the country’s Ministry of Economy and Finance and environmental activists to abandon coal and help achieve the country’s goal of net zero carbon by the year 2050. In July, a coalition of French business groups called on its members, including banks, insurers and investors, to define “a global exit schedule for the financing of coal activities.”
The Unfriend Coal campaign, in a report released this month with BankTrack, not only called BNP Paribas one of the leading financiers of coal, it said the bank was offering growing support for “some of the largest developers.”
“BNP Paribas undoubtedly has the worst policy adopted by the major French banks,” Unfriend Coal said.
BNP Paribas, in announcing its targets, emphasized that Dealogic ranks it as the No. 1 financier of renewable energy projects in Europe, Middle East and Africa. The bank also said it raised a target for financing renewable energies to about $19.9 billion by 2021 after achieving its prior goal of about $16.5 billion by 2020.
The move reinforces the bank’s advice that investors interested in the energy industry need to focus on renewables like solar and wind rather than old standards like fossil fuels and coal. “Coal will be phased out, oil use is set to peak, renewable energy generation is rising,” Daniel Morris, senior investment strategist at BNP Paribas, wrote in a blog post this month.
- Today’s announcement is the latest move by BNP Paribas to shift its focus in the energy sector. In 2015, BNP Paribas committed to aligning its financing and investment activities with the conclusions of the Paris agreement. Since then, the Bank stopped financing for certain categories of companies that are not engaged in a transition.
- “Getting out of coal to contain global warming is no longer a matter of debate,” Unfriend Coal said.
- In the U.S., coal has been losing market share to renewables despite the Trump administration’s efforts to shore up the industry. U.S. electricity plants used about a quarter less coal in the latest period where data was available while renewables grew, according to the Energy Information Administration.