BNP Paribas accelerates 'complete coal exit' plan

BNP Paribas yesterday announced a further strengthening of its coal divestment strategy, pulling forward the target date for ending the use of coal power by its electricity generating customers in multiple countries and confirming it will not take on new customers who are reliant on coal for over a quarter of their revenues.

The French banking is widely regarded as a leader in sustainable investment practices and has been tightening its funding criteria for coal-related activities since 2011.

Since 2017, it has not financed a single new coal-fired power-plant project anywhere in the world and does not advise on the purchase or sale of such assets. Moreover, last year it announced a 2030 cut-off date for its EU-based electricity-producing customers to get out of coal generation, alongside a 2040 cut-off date for customers in the rest of the works.

Last year, the share of coal in electricity generation for BNP utility customers averaged less than 18 per cent, compared to 38 per cent for all global electricity companies.

Yesterday, the bank announced it was strengthening its investment criteria further by extending its 2030 target date for electricity-producing customers to end the use of coal to all OECD countries, meaning the vast majority of its utility customers globally are now covered by the 2030 cut-off date.

Moreover, the company said "as of today BNP Paribas will not be accepting any new customers whose share of coal related revenue surpasses 25 per cent" and stressed that it will "continue its commitment to end, in the near future, relations with any customer developing new coal-based production capacity".

The bank added that all the new provisions cover both loans and financing through financial markets.

"After reviewing the portfolio, the implementation of this policy will quickly lead to a reduction of about half of the number of companies producing electricity from coal among BNP Paribas' customers," the firm said.  

Meanwhile, those customers who remain in the portfolio will have to deliver a coal-exit trajectory compatible with the objectives of the Paris Agreement or demonstrate that they have credible plan to become compatible with the international climate treaty "in the coming years".

"For almost 10 years our policies have attested to our commitment to be a major international bank that is particularly advanced with regard to the energy transition," said Jean-Laurent Bonnafé, director and chief executive at BNP Paribas Group. "BNP Paribas is the first bank in the world that has set a coal-exit date, decided to end the financing of shale-gas and tar-sands specialists, and acquired a leading position in financing renewable-electricity projects. Beyond coal and unconventional hydrocarbons, we are putting in place innovative tools that will enable us to systematically introduce environmental criteria into our lending decisions and align our portfolio with the objectives of the Paris Agreement."

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• Topics
• Investment
• Infrastructure
• Coal
• divestment
• stranded assets
• carbon bubble
• BNP Paribas