European banks finance oil and gas expansion despite IEA warning – report

LONDON, Feb 14 (Reuters) – European banks are providing billions of dollars in financing to expand oil and gas production, a report showed on Monday, despite International Energy Agency recommendations against new facilities to slow down global warming.

In 2021, twenty-five of the region’s top banks collectively provided $55 billion to energy companies planning to expand oil and gas production, said ShareAction, a responsible investment nonprofit in the global economy. report.

While that marked a decline from the $106 billion lent in 2020 and $83 billion in 2019, it was higher than the $49 billion and $50 billion lent in 2018 and 2017, respectively.

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An IEA report in May said there should be no investment in new oil and gas fields in order to have a 50% chance of capping global warming at 1.5 degrees Celsius above of the pre-industrial average. Read more

The funding comes as 24 of the banks themselves have pledged to decarbonize their loan portfolios, the report said, adding that HSBC (HSBA.L), Barclays (BARC.L) and BNP Paribas (BNPP.PA) were among major finance providers. in 2021.

ShareAction said it is calling on investors to demand that banks implement policies to restrict funding for oil and gas expansion and support climate-related shareholder resolutions in the upcoming meeting season. annual general.

“Last year, shareholders helped push banks to adopt or tighten restrictions on coal financing,” said Kelly Shields, head of banking standards at ShareAction.

“This year, they need to replicate that success with oil and gas expansion,” Shields added.

An HSBC spokesperson said it was working with customers on the energy transition and would release science-based targets to align oil and gas financing with Paris agreement targets and timelines on February 22.

A Barclays spokesperson said it was also aiming to align its funding with the global climate agreement reached in 2015 and had set a target of an absolute 15% reduction in funded emissions from its energy customers. energy by 2025.

A BNP Paribas spokesperson was not immediately available for comment when contacted by Reuters.

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Reporting by Simon Jessop and Tommy Wilkes; Editing by Alexander Smith

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