Investors urge big banks to shun fossil fuel

Investors with US$1.5 trillion have called on Barclays, BNP Paribas and three other major European banks to halt the direct financing of new oil and gas fields by the end of this year.

Aegon Asset Management and Candriam are among 30 money managers to urge the banks, which also include Credit Agricole, Deutsche Bank and Societe Generale, to cease financing activities that “may jeopardise the global path to net-zero,” according to a statement. The campaign was co-ordinated by ShareAction, a London-based nonprofit that has also instigated shareholder resolutions urging Barclays and HSBC Holdings to phase out fossil fuels.

Financial firms backing new fossil-fuel projects are increasingly finding themselves in the crosshairs, as investors act on the International Energy Agency’s 2021 warning that an immediate halt to such activities is essential to ensure global warming doesn’t exceed the critical threshold of 1.5C.

“We’re running out of time to avert the worst consequences of climate disaster, and the banking sector is still struggling to implement the bare minimum,” said Anders Schelde, chief investment officer of Denmark’s AkademikerPension, one of the investors to send the letters. “This is unacceptable in 2023.”

A spokeswoman for Barclays said the bank “can make the greatest difference” by working with customers and clients to move towards a low-carbon economy. Barclays also wants to focus on “facilitating the finance needed to change business practices and scale new green technologies,” she said.

A spokeswoman for BNP pointed to new targets unveiled by the French bank last month, and added that BNP believes its current “trajectory is fully in line” with the IEA’s net-zero scenario.