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Paris-based international banking and investment group Crédit Agricole announced today that it will no longer […]]

Crédit Agricole Ends Financing for New Oil and Gas Projects – ESG Today

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Energy Transition/ Sustainable Finance

Crédit Agricole Ends Financing for New Oil and Gas Projects

Mark Segal

December 15, 2023

Paris-based international banking and investment group Crédit Agricole announced today that it will no longer finance new fossil fuel extraction projects, and will end financing of independent producers focused exclusively on exploration or production of oil and gas.

The new policies form part of a new series of measures announced by the bank, aimed at strengthening and accelerating its climate strategy, including several measures specifically targeting its business in the energy sector, and an expansion of its net zero-focused commitments to five new priority sectors, as well as a number of governance and management-focused initiatives to implement its climate ambitions.

The announcement makes Crédit Agricole the latest in a series of major European-based banks to commit to exit new fossil fuel financing, with similar policies introduced over the past year by HSBC, BNP Paribas and Societe Generale. After HSBC announced its policy in December 2022, each of the other banks, along with Barclays and Deutsche Bank were targeted in a campaign led by ShareAction and including investors representing more than $1.5 trillion in assets, calling for commitments to end financing for new oil and gas fields this year.

Additional energy sector-related commitments announced by Crédit Agricole include increasing its focus on renewable energies and low-carbon infrastructure, with goals including tripling annual financing of renewables by 2030, and growing exposure to low carbon energies by 80% by 2025, and to accelerate its financed emissions reductions in the sector to twice as fast as the net zero 2050 scenario.

Crédit Agricole also adopt a “selective approach” to players involved in the energy transition, including reviewing its corporate financing for energy sector companies on a case-by-case basis, taking their transition commitments into account.

As part of its revised climate strategy, the bank also introduced net zero 2050-focused commitments for five new sectors, including residential real estate, with plans to engage with property owners on energy efficient renovations, develop new customer solutions and position its credit and pricing policies to incentivize renovation work; agriculture, including supporting farmers in the transition process, launching an ag-focused voluntary carbon market and introducing funds targeting agriculture value stream decarbonization; aviation, with plans to finance new energy efficient aircraft and become involved in the sustainable aviation fuel value chain; shipping, including working to hep clients finance vessel retrofits and financing the construction of green fuel-powered vessels, and; steel, with plans to engage with clients not aligned on a 1.5°C trajectory to support their decarbonization and to provide project financing of low-carbon steel production technologies.

Additional measures announced by Crédit Agricole include the creation of a new Societal Commitment Committee comprised of board members and an ESG Strategy Committee chaired by the CEO, and continued training of all employees on climate issues.

The bank also stated that CSR performance criteria have been included in the remuneration of executive officers, accounting for 20% of annual variable remuneration, and 33% of long-term variable remuneration.

Crédit Agricole CEO Philippe Brassac, said:

“In a context of climate emergency, we need to amplify our commitment towards measures supporting the transformation of society. The strengthening of our climate strategy means to focus and amplify our commitments towards the energy sector, by focusing and strengthening our financial resources towards renewable energies.”

Mark founded ESG Today following a 20 year career in investment management and research. Prior to founding ESG Today, Mark worked at Delaney Capital Management (DCM) in Toronto, Canada, most recently as the firm’s head of U.S. equities. While at DCM, Mark was part of the firm’s ESG team, responsible for evaluating and tracking the sustainability factors impacting portfolio companies, and assessing the suitability of companies for portfolio inclusion. Mark also spent several years in the sell-side research industry, covering the technology and services sectors. Mark holds an MBA from Columbia University in New York, a BBA from the Schulich School of Business at York University in Toronto, and is a CFA charterholder.

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