French bank Société Générale withdraws from Rio Grande LNG
Société Générale has withdrawn its financial advisory role from the controversial Rio Grande LNG project. This decision comes after years of mobilisation by US and French organisations, and it sends a powerful signal to other financial institutions to steer clear of environmentally destructive projects like this one.
BankTrack played a supporting role in advocacy towards banks on this project. For example in August 2019 we co-signed and sent a letter to financiers setting out why financial institutions should not provide financial services to four South Texas Fracked Gas Export projects, including the Rio Grande LNG terminal. Together with Rainforest Action Network, Sierra Club, and Friends of the Earth France, we organised a webinar for potential financiers. And in November 2019 we published a Dodgy Deal profile on the Rio Grande LNG terminal as an early warning for financiers about the potential impacts of the conversion project.
The French bank had been the target of a coalition of US and French organizations since 2017, when it was engaged as financial advisor by the project sponsor, NextDecade. The organizations welcome this news and call on all financial institutions to stay away from this disastrous LNG project. 1
This public announcement follows NextDecade’s recent one that it would reach a final investment decision for its Rio Grande LNG project by the summer of 2023, after securing several sales and purchase agreements in the past months.2 Among the buyers are the French utility Engie, which committed in May 2022 to import fossil gas from Rio Grande LNG for 15 years – until at least 2041. 3 TotalEnergies is also expected to announce a new buying contract with NextDecade. 4
“After years of mobilization by activists and communities on both sides of the Atlantic, this announcement is a victory for civil society and a defeat for Rio Grande LNG. It comes at a time when far too many governments and companies in Europe are rushing into US LNG, locking us into dependencies that are already costing the climate and citizens far too much.''
CAMPAIGNER AT FRIENDS OF THE EARTH FRANCE
She adds: ''This withdrawal of Société Générale is a major blow for NextDecade and should send a clear signal to those like TotalEnergies taking advantage of the crisis to bet on the dirty shale industry.”
This is not the first setback for the LNG development planned in the Rio Grande Valley. In 2017, a mobilization campaign in France pushed BNP Paribas to withdraw from its advisory mandate for the neighboring project Texas LNG and to announce the end of its direct support to new LNG infrastructures connected to shale gas extraction 5. In 2021, Société Générale had in turn taken a first step towards exiting these projects, committing to stop financing North American LNG, but kept an exception for its existing support and Rio Grande LNG. 6
Juan Mancias, Chairman of the Carrizo Comecrudo Tribe of Texas, said: “We traveled to Paris in 2017 to meet with French banks officials. We protested outside their bank offices, confronted their shareholders. French bank BNP Paribas stopped their support for Texas LNG but we were booed at Société Générale’s annual general meeting. But we did not back down and Societe Generale has finally withdrawn from Rio Grande LNG. Years and years of facing these banks and demanding that they step off our sacred lands and sacred sites have led us to these great victories. Now is the time for other banks, starting with Crédit Agricole and Natixis to also commit not to finance new LNG in the United States.”
Rebekah Hinojosa, with Sierra Club, said: ''Today’s victory is seven years in the making. Our community and the Carrizo Comecrudo Tribe have been pushing banks to pull their support for the proposed Rio Grande LNG gas project that is already destroying sacred Native lands, would pollute the Rio Grande Valley, and wreck the climate. Societe Generale’s withdrawal from Rio Grande LNG is a warning to all other major banks – stop supporting fracking and LNG.''
On March 8th, 37 NGOs wrote to the chair of the Net-Zero Banking Alliance to call for its members’ commitment not to support the Rio Grande LNG nor any fracked gas export terminals and related infrastructure projects proposed for the Rio Grande Valley in South Texas.7 The Net Zero Emissions by 2050 scenario of the International Energy Agency, which aims at limiting global warming at 1.5°C, projects the end of new LNG terminals beyond those approved by the 1st of January 2023. Yet, only a minority of banks have committed not to finance these new projects. 8
Lucie Pinson, director of Reclaim Finance, said: ''By ending its role as financial advisor, Société Générale has finally taken the measure of the problem concerning the Rio Grande LNG project. We now hope that the bank will not be replaced by other banks such as Crédit Agricole and Natixis, which have not yet committed not to support such dreadful projects. New LNG terminals are pulling us away from a 1.5°C target and it is time for banks to align their financing with this ultimate objective, a commitment they made by joining the Net Zero Banking Alliance.''
Ash Engle, Banks Campaigner at Rainforest Action Network said: ''Banks can’t be allowed to finance any project without the Free, Prior, and Informed Consent of Indigenous peoples upon whose lands these projects are being proposed. While this is a step in the right direction, the truth is that since the Paris agreement, Société Générale has provided over $87 million dollars in financing to fossil fuel companies and still has weak policies on fossil fuel expansion. It should not take this long to convince banks that sovereignty is worthy of recognition and respect. We want to see Société Générale phase out bankrolling fossil fuels all together. We expect other banks, including the top U.S. financiers of LNG projects, to take note of this news and follow suit immediately.''