French lender BNP Paribas has become the first commercial bank to be sued for its financing of fossil fuels and contribution to climate change.
NGOs Friends of the Earth France, Notre Affaire à Tous and Oxfam France filed a lawsuit at the Paris Judicial Court on February 23 accusing BNP Paribas of failing to comply with France’s corporate duty of vigilance law.
“The urgent warning professed by the scientific community and the International Energy Agency has recently been reiterated through repeated statements from the United Nations: a bank cannot claim to be committed to net zero while supporting new oil and gas projects,” says Lorette Philippot, campaigner at Friends of the Earth France.
The Paris-headquartered bank was given notice on October 26 last year, but the campaign groups say that although it has made a commitment to reduce its financing for oil and gas extraction and production by 2030, it has not required its oil and gas clients to stop developing new fossil fuel projects, nor has it begun its exit from the sector.
According to the 2022 Banking on Climate Chaos report, which is authored by several non-profits and analyses the extent of fossil fuel banking, BNP Paribas is tenth on the list of the top banks financing fossil fuels globally. It invested US$142bn into the sector between 2016 and 2021.
In a statement provided to GTR, BNP Paribas says it regrets the NGOs “have chosen to engage in litigation rather than dialogue” and that its “exit from fossil fuels is largely on track”.
“BNP Paribas, like other major international banks, is a long-standing financier of energy production,” the bank says. “Today, already 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%, well ahead of the transition of the rest of the economy.”
Noting that it decided to exit thermal coal entirely in 2019, the bank says it is leaving the exploration and production of oil, and expects its oil portfolio to amount to less than €1bn by 2030.
“Regarding gas, we will reduce our production financing by 30% and focus on supply and low-emission power plants, in line with the European taxonomy, which considers that gas has a role to play in the ecological transition under certain conditions,” it adds.
Climate lawsuits against companies and governments are not new – for example, British oil giant Shell’s board of directors is being sued in the US by Global Witness for allegedly making misleading disclosures over its support for renewable energy – but the lawsuit is a first for a financial institution.
Enacted in 2017, France’s duty of vigilance law obliges companies to prevent and remedy harmful impacts on the environment resulting from their activities and those of businesses in their value chains.
Justine Ripoll, campaigner at Notre Affaire à Tous, says “this first climate litigation against a commercial bank is undoubtedly the first of many around the world”.
Banks and investment funds are however likely to be excluded from the EU’s proposed reforms on corporate sustainability due diligence, which also requires companies to stamp out human rights and environmental abuses in supply chains.