By Tommy Wilkes
LONDON (Reuters) – France’s BNP Paribas pledged on Tuesday to end most new financing for oil production in the Amazon rainforest and said it would reduce its “financed emissions intensity” in the energy and auto sectors.
Emissions intensity is a measure of emissions relative to output that some climate activists have said does not go far enough.
BNP Paribas and more than 100 other banks have pledged to reach net zero carbon emissions by 2050 but are under pressure to provide details on the deep shorter-term cuts to “financed emissions” that are needed if they are to have any chance of meeting their goal.
BNP Paribas said for upstream oil and gas refining, its financed emissions intensity will fall by at least 10% by 2025; for automotive clients by at least 25%; and for power generation businesses by at least 30%.
“Our strategy is threefold: align our portfolio with our net-zero commitment; measure and pilot our carbon-related risks; and broaden and deepen client relationships to support them as they make their low-carbon transition,” CEO Jean-Laurent Bonnafe said.
BNP said the targets were determined using International Energy Agency climate scenarios, as well as the Net Zero Banking Alliance (NZBA) framework.
The NZBA is a voluntary group of banks committed to aligning lending and investment portfolios with net-zero emissions by 2050.
BNP said it would hit its oil and gas-related targets by reducing its credit exposure to the sector by 12% from a 2020 baseline, and that it had already reduced its exposure in 2021 by 6% as it toughened its stance on lending to unconventional oil and gas.
Its pledge to end Amazon oil financing includes new oil and gas production as well as for companies developing related infrastructure.
However, BNP Paribas left open the door to some continued financing in the Amazon by adding that the exclusions would “not apply to companies with the most credible transition plans towards a net-zero economy by 2050”.
Climate campaigners have said banks must stop backing fossil fuel extraction in the Amazon rainforest, the world’s largest, given its importance for biodiversity and its vital role in regulating the Earth’s climate by absorbing carbon dioxide.
(Reporting by Tommy Reggiori Wilkes; Editing by Lisa Shumaker)
