The development of our contemporary societies has largely been built on fossil fuels and still depends much on them. To reverse the trend and achieve a net-zero target by 2050, BNP Paribas has undergone a major transformation in the past 14 years.
In 2010, the Group published its first policy to restrict its financing in the coal sector before deciding in 2020 to completely withdraw from thermal coal, with a total effective exit by 2030 in the European Union and OECD(1) countries and by 2040 in the rest of the world. In 2017, BNP Paribas was the first bank in the world to cease all financing (loans and bonds) to specialists in unconventional hydrocarbons (shale oil and gas, tar sands, coalbed methane, etc.).
In January and May 2023, we made a major strategic shift in the financing of energy production by withdrawing from the financing for oil and gas exploration-production and redirecting our financial flows towards the production of low-carbon energies, in line with the International Energy Agency’s (IEA) 2050 net-zero scenario. This scenario highlights the need for a very significant increase in investments in low-carbon energies, which are essential for a complete withdrawal from fossil fuels, and for carbon neutrality by 2050. Concretely, this involves stopping all financing, of any kind, dedicated to the development of new oil or gas fields. We’re also committed to dedicating more than 80% of our energy financing to low-carbon energy, mainly renewable, to reach a minimum credit exposure of €40 billion by 2030. This last target has since been brought forward to 2028, and raised to 90% by 2030. The residual share of fossil energy production loans in our energy production loan portfolio will then represent less than 10%. Lastly, by 2030, we’re targeting an 80% reduction in our credit exposure to oil exploration and production, and a 30% reduction in our gas exploration and production financing compared to September 2022. At the start of 2024, our credit exposure to low-carbon energy production amounted to 65% of our total energy production exposure. The shift has taken place.
Our commitments on our loan portfolio is also reflected on the bond market. Thus, the Group has become the world leader in ESG(2) bonds and loans, which amounted to US$62.5 billion in 2023(3). It now ranks only 41st worldwide in terms of bonds issued in the fossil fuel sector(4), and has not participated in a single bond issue in the oil and gas sector since mid-February 2023.
“At BNP Paribas, we are turning the page on fossil fuels. The shift has taken place. We now mainly finance low-carbon energies.“
Three questions on the transformation process
How is the role of the Company Engagement Department changing?
ANTOINE SIRE Our roadmap has expanded as we enter a phase of industrialisation and acceleration of ESG issues within the Group. The urgency of the situation, highlighted by scientists, regulators, the expectations of civil society and COP 28, calls for a massive mobilisation of the financial sector to support the energy transition.
What role do financial actors, in particular BNP Paribas, play in financing the transition?
A.S. Changing models involves significant investments. Financial actors must mobilise their resources to support the economic system towards a low-carbon world. They play a key role in supporting economic actors.
Could you cite examples of key transformation challenges for BNP Paribas?
A.S. To name but two: access to robust ESG data, which is essential to measure, assess, act on and report our progress; and the acquisition of sustainable development skills by all our teams, which is a priority to enable everyone to contribute.