Climate action or greenwashing? The Oil and Gas Policy Tracker assesses financial players

Launched last March by Reclaim Finance and 16 NGOs to assess the oil and gas exclusion policies of the top global financial institutions, the Oil and Gas Policy Tracker (1) now includes 369 banks, insurers and investors from 32 countries. This tool reveals that despite many of them pledging to tackle climate change and halve emissions by 2030, less than 4% of those rated in the tool have restrictions in place against oil and gas expansion (2). Reclaim Finance calls on all financial institutions worldwide to align their business with the 1.5°C scenario by implementing robust oil and gas policies.

Initially focused on the 150 world’s largest financial institutions (FI), the Oil and Gas Policy Tracker (OGPT) now includes 369 FIs (with 104 banks, 30 insurers and 235 investors). It analyzes and rates their oil and gas exclusion policies based on science-based indicators: restrictions on new oil and gas projects, restrictions on companies developing new oil and gas projects and finally, strategies to phase out oil and gas (3).

The OGPT is designed to differentiate robust policies from ineffective pledges by financial institutions. Despite growing pressure to stop fueling oil and gas expansion in order to cut down on carbon emissions and align their business with 1.5°C, too few financial institutions have adequate policies in place:

• 136 of the 369 financial institutions rated in the OGPT have adopted an oil and gas policy, which means more than 2/3 of them don’t even have a policy.
• Only 13 financial players rated in the OGPT have a policy tackling (totally or partially) oil and gas expansion, which means less than 4% are committed to aligning their business with climate science to stay below 1.5°C.
• No more than 27 financial players rated in the OGPT have adopted ambitious commitments on unconventional oil and gas through the exclusion of some developers and/or a phase-out strategy.
• Yet, 158 of them have committed to carbon neutrality by 2050 joining an alliance of the Glasgow Financial Alliance for Net Zero (GFANZ) (4).

Clément Faul, Research & Analysis Manager at Reclaim Finance, declares: “The outcomes of the Oil and Gas Policy Tracker are clear: most financial institutions worldwide don’t get the climate emergency. It is alarming to find out less than 4% of the financial institutions rated in the tool have a robust policy tackling oil and gas expansion. All the others, even those members of the Glasgow Financial Alliances for Net Zero, fail to align their business with a 1.5°C pathway. French players La Banque Postale, Ircantec and CNP Assurances have crossed the rubicon and shown that it’s possible for banks and investors to phase out support for oil and gas (5). Their peers must follow.”

“Despite Antonio Guterres’ recent call on all financial institutions to abandon fossil fuel finance and invest in renewable energy, most banks, insurers and investors continue to support companies with ruthless expansion plans. The war in Ukraine and the heatwaves hitting Europe, India and Pakistan should be a violent wake up call and encourage all banks, insurers and investors to take real climate action and stop fueling a fossil-fuel based future”, says Lucie Pinson, director of Reclaim Finance.

Notes:

1. The Oil & Gas Policy Tracker scores the financial institutions’ oil and gas policies, developed by Reclaim Finance and supported by 16 NGO partners.
2. Only 13 of the 369 financial players rated in the OGPT have a robust policy tackling (totally or partially) oil and gas expansion. Of the 13 financial players concerned, 7 have a robust policy against all oil and gas expansion (La Banque Postale, CNP Assurances, Ircantec, MAIF, MACIF, Abeilles Assurances and Handelsbanken), 6 other financial players have a policy against expansion but limited to non-conventional oil and gas (Anaxis, Groupama, Groupama AM, Lloyds Banking group (oil sands only) and Natwest (oil sands and coalbed methane only)) or to new clients only (Commerzbank).
3. Find out more about the methodology of the Oil and Gas Policy Tracker here.
4. The Glasgow Financial Alliance for Net Zero (GFANZ) brings together all private financial institutions committed to carbon neutrality under a 1.5°C pathway. Members are required to meet the criteria set by the UN Race to Zero initiative, which include halving their emissions by 2030 and ending support for new fossil fuel assets.
5. La Banque Postale, one of the 50 largest banks in the world, set a standard in October 2021 to exclude all companies with oil and gas expansion plans on the Global Oil & Gas Exit List. CNP Assurance, a subsidiary of La Banque Postale with €337 billion of assets under management, stopped all new direct investment in upstream oil and gas developers. As members of a net-zero alliance, La Banque Postale and CNP Assurance are setting an international precedent for every other financial institution. Ircantec, a French pension fund with more than €12 billion in the portfolio, excludes 95% of companies active in unconventional hydrocarbons.
6. Calls to move towards a rapid halt to the expansion of fossil fuels and to organize the exit from these sectors are multiplying internationally, relayed by the UN Secretary-General Antonio Guterres and the UN Race to Zero initiative. The International Energy Agency (IEA) itself leaves no room for new oil and gas fields in its scenario for achieving carbon neutrality in 2050.

Contact:

• Lucie Pinson, Director of Reclaim Finance, lucie@reclaimfinance.org, +33 6 79 54 37 15
• Clément Faul, Research and Analysis Manager, clement@reclaimfinance.org, +33675878311
• Anaïs Lehnert, Communication Manager, anais@reclaimfinance.org, +33 6 70 08 58 98

Read the original piece here.

Reclaim Finance is a French NGO that conducts research on financial institutions exposing those who hinder climate-related regulations, and whose practices violate human rights and destroy the environment.