Banks Heavily Finance Oil Firms Despite Climate Goals

European banks, while pledging to tackle carbon emissions, are heavily financing companies involved in the expansion of oil and gas production, activist group ShareAction said on Monday.

A total 25 lenders, led by HSBC, Barclays and BNP Paribas, last year provided fossil fuel groups with a total of US$55 billion (48.5 billion euros), ShareAction said in a report.

The activist group urged investors to use their shareholder rights to push banks to exclude finance for oil and gas expansion.

"Last year, shareholders were instrumental in pushing banks to adopt or strengthen restrictions on coal finance," said Kelly Shields, senior officer for banking standards at ShareAction.

"This year, they need to replicate that success with oil and gas expansion."

Responding to the findings, HSBC said in a statement that it was committed to working with its "customers to achieve a transition towards a thriving low-carbon economy".

Barclays said it continued to focus on its "ambition to become a net zero bank by 2050".

It said that it has "restrictions around the direct financing of new oil and gas exploration projects in the Arctic or financing for companies primarily engaged in oil and gas exploration and production in this region".

ShareAction said there was little evidence to show that banks want to help clients to transition away from fossil fuels.

"ShareAction's research found that Danske Bank and NatWest are the only (European) banks publicly requesting some of their oil and gas clients to publish transition plans by a set date".

It said that France's La Banque Postale is the only lender to require clients to rule out oil and gas expansion.

Reacting to the study, BNP Paribas said it provided major finance to European energy companies showing "strong investment in the development of renewables". (AFP)