Crédit Agricole and Société Générale announce end to financing of coal power projects
One week before Climate Finance Day, top French banks Crédit Agricole and Société Générale have followed the lead of Natixis and announced the end of their financing for coal power plant projects globally, moves welcomed by Friends of the Earth France. However, the group criticised Crédit Agricole and Société Générale for pressing on with support for new coal power projects in Indonesia and the Dominican Republic. BNP Paribas now finds itself as the only major French bank not to have committed to ending its direct financial support for coal power plants.
The new policy measures from Crédit Agricole and Société Générale complement other coal finance restrictions adopted by both banks in 2015 when they announced an end to their direct financing of coal mining projects and a cessation of direct financial support for coal power projects in ‘high income’ countries .
Lucie Pinson, private finance campaigner for Friends of the Earth France, commented:
"Crédit Agricole and Société Générale have lined up next to Natixis which in 2015 grasped that the only credible policy was one which ruled out all project financing for new coal plants worldwide. BNP Paribas now finds itself isolated as the last major French bank which continues to permit direct financial support for coal plants. However, just like Crédit Agricole, BNP Paribas committed at the Paris COP last year to do everything possible in order to ensure that the objectives of the Paris Agreement are met or exceeded.
"BNP Paribas must now make the same commitment as its peers so that the French banking sector can become the global leader in ending direct financial support for coal, the sector which remains the most incompatible with the objectives of the Paris Agreement."
The climate impacts of these new moves from Crédit Agricole and Société Générale are limited, however, as they apply only to project financing. The majority of banks’ support for the coal industry is done through business financing and services.
Yann Louvel, Climate and energy campaign coordinator for BankTrack, commented:
"The crucial thing right now is to prevent hundreds of new coal plant projects around the world from accessing finance, whether it be direct or indirect financing. The latest announcements from Crédit Agricole and Société Générale may be going in the right direction, but they remain insufficient as the banks are still able to finance the companies which build these projects.
"Only Société Générale is saying that it intends to reduce its support to coal companies in order to be in line with the 2 degrees scenario trajectory of the International Energy Agency by 2020. This is an interesting approach from the bank, but it needs to be complemented by the adoption of specific exclusion criteria in order to send a clear signal to companies in the coal sector."
Friends of the Earth France has also criticised the new commitments from Crédit Agricole and Société Générale as they do not apply to coal power projects in Indonesia and the Dominican Republic where both banks are involved and, in the case of Société Générale, the commitments will only take effect in 2017.
Lucy Pinson concluded:
"We denounce the double game of Crédit Agricole and Société Générale, as they have not withdrawn from proposed coal power plant projects in Indonesia, although no funding has been decided yet in these cases. We also remain cautious about how this new commitment from Société Générale will be applied, as the bank has recently been violating all of its coal power policies dating as far back as 2011 with its financing of the heavily polluting and outdated Punta Catalina coal plant in the Dominican Republic."
Notes for editors:
1. See Crédit Agricole’s press release (French only); see Société Générale’s new coal power policy and its new mining sector policy
2. See a summary (in French) of coal finance commitments made by French banks in 2015
3. BNP Paribas is a signatory to the Paris Pledge for Action.
4. Société Générale’s policy indicates how it intends to operationalise this commitment by reducing its exposure to the extraction of coal by 14% and limiting the coal share in its financed energy mix to 19% by the end of 2020. The bank has also laid out a specific exclusion criterion, applying to companies whose main activity is related to coal, but it is still insufficient and only applies to new customers, not its existing customers.
5. Crédit Agricole is involved in the Tanjung Jati B 2 and Cirebon 2 coal power projects in Indonesia. Société Générale is involved in Tanjung Jati B 2 and has already disbursed finance for the Punta Catalina project in the Dominican Republic. For more information on the climate, environmental, health and economic risks of Tanjung Jati B 2, see ‘Indonesia: The climate test for Crédit Agricole and Société Générale’, published in May 2016 by Friends of the Earth France and Greenpeace.
Background information about the Cirebon 2 project is available at the BankTrack website.
6. See a briefing (in French) on the proposed Punta Catalina project and how it violates all the policies of Société Générale in place since 2011.