BNP Paribas no longer wants to stick its nose in coke. The bank announced on Wednesday that it would include metallurgical coal, intended mainly for the steel industry, among the sectors that it will no longer finance for environmental reasons. Until now, only thermal coal, mainly used for electricity production, was affected by this promise.
This commitment coincides with the publication this Thursday of the report from the NGO Reclaim Finance, whose objective is “to put finance at the service of social and climate justice”. BNP Paribas thus becomes one of the rare banks to make such a commitment in the field of metallurgical coal.
Objectives for thermal coal
In 2020, the bank committed to completely exiting the financing of the entire value chain of companies linked to thermal coal by 2030 in OECD and European Union countries, and by 2040 in the rest of the world.
The new commitment “is part of the work to align BNP Paribas’ credit portfolio in the steel sector with its “net zero” commitment,” according to the bank. She further recalled “that in 2022 and 2023 (she) had set targets for reducing the intensity of carbon emissions financed in the first 6 sectors: oil and gas, electricity production, automobiles, steel, aluminum and cement.
Reclaim Finance notes for its part in a press release that “only five of the fifty banks analyzed – Société Générale, BNP Paribas, HSBC, Westpac and Caixa Bank – have adopted commitments against the financing of metallurgical coal mining projects”. “However, these same policies in no way prevent them from supporting the expansion of the sector since financing to businesses is still authorized,” regrets the NGO.
An industry that particularly emits CO2
“The steel industry is the largest industrial emitter of CO2”, recalls Reclaim Finance, which specifies that due to “the use of metallurgical coal in its production, steel is responsible for 11% of emissions worldwide, ahead of the 2.1% of the aviation sector. According to the NGO, 138 projects for new mines or extensions of existing mines intended to produce metallurgical coal currently exist around the world.
It further claims that between January 2016 and June 2023, banks provided more than $557 billion (around €510 billion) to the 50 companies that develop the most metallurgical coal. Among French banks, BNP Paribas dedicated 4.5 billion dollars, Crédit Agricole 3.7 billion, Société Générale 3.5 billion and BPCE/Natixis 1.6 billion dollars. They rank between 11th and 42nd position of banks having contributed the most to this sector in the world over these seven and a half years, according to Reclaim Finance.