French Lender BNP Paribas Sued for Financing Fossil Fuel Projects
Three climate activist groups have filed a lawsuit against BNP Paribas (EPA: BNP), one of Europe’s largest banks, accusing the French lender of breaching its legal duty to ensure its activities do not cause environmental damage. The groups say that this is a first-of-its-kind lawsuit against a commercial bank.
The groups — Oxfam, Friends of the Earth, and Notre Affaire à Tous — allege that BNP Paribas’ loans to big oil and gas companies funded more than 200 new fossil fuel projects worldwide, and they demand that the bank stop financing fossil fuels.
A 2017 French law requires companies to draft environmental damage vigilance plans, making it their responsibility to identify and prevent potential risks to human rights and the environment as a result of their business activities.
Another French company, TotalEnergies (EPA: TTE), a client of BNP Paribas, is facing a lawsuit from environmental groups for allegedly misleading customers about its efforts to fight climate change.
Climate activists are using lawsuits to force big companies to be more accountable for their part in tackling the climate crisis. In 2021, Shell (LON: SHEL) was ordered by a Dutch court to extend its planned greenhouse gas emission cuts in a lawsuit filed by climate activists. The three activist groups’ legal approach against BNP Paribas is modeled on the case in the Netherlands in which Shell was ordered to increase planned cuts in its greenhouse gas emissions. The oil and gas giant filed an appeal against the ruling last year.
BNP Paribas is the eighth-largest contributor to oil and gas production among international banks, with $142 billion worth of financing in fossil fuels between 2016 and 2021, according to the “Banking on Climate Chaos” report from RainforestAction Network. The bank has 23.7 billion euros ($25.2 billion) in outstanding loans for fossil fuels as of the end of September 2022.
The bank claims that it had stopped oil project financing in 2016, and that it could not stop all fossil fuel financing right away but is working on its exit path. They also committed to reduce outstanding financing for oil extraction and production by 25% by 2025. They told Reuters that it regretted the advocacy groups’ choice to file a suit over having a dialogue.
“We’re convinced that the ecological transition is the only viable path for the future of our economies,” the bank said. “We are focused on our fossil fuel exit path, accelerating financing for renewable energies and supporting our customers, without whom the transition cannot be made.”
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