Pages tagged "bnpparibas"


Time for France’s Biggest Bank to Stop Funding Mountaintop Removal Coal

This post is by Ben Collins of RAN and Yann Louvel of BankTrack.

The campaign to stop bank financing of mountaintop removal coal mining is gaining momentum.

For years, RAN and other organizations in the global BankTrack network have urged U.S. and European banks to stop financing the devastation caused by mountaintop removal (MTR) coal mining. BankTrack members have worked closely with advocates from Appalachia — the region hardest hit by MTR — including Paul Corbit Brown and Elise Keaton from Keeper of the Mountains, and Bob Kincaid from Coal River Mountain Watch. Together, they’ve travelled around the U.S. and Europe to speak directly to CEOs and boards of banks at their annual shareholder meetings and urge them to stop bankrolling mountaintop removal coal mining.

This week, we have an opportunity to push France’s biggest bank, Crédit Agricole, to stop profiting from MTR once and for all. At today’s annual shareholder meeting, Paul Corbit Brown and staff from Friends of the Earth France urged the bank’s CEO, Jean-Paul Chifflet, to follow the lead of other banks and stop funding the biggest and most destructive MTR companies.

Take action: Now’s the time to back them up — please add your voice now! GFC_MTR_crop 

Public pressure to stop funding MTR started showing results a few years ago. U.S. banks were the first to react in 2008, adopting a mix of enhanced due diligence procedures and financing thresholds for companies that engage in mountaintop removal. But real change started to happen last year, when Wells Fargo in the U.S., and Crédit Agricole and BNP Paribas in France, adopted new policies on MTR. These covered both direct project financing of MTR projects — which is pretty rare — and, more importantly, general corporate financing of coal mining companies active in MTR.

The implications of these new policies are potentially huge: the biggest and most harmful producers of MTR coal, such as Alpha Natural Resources and Arch Coal, raise their funding from general corporate loans from banks or from bonds or shares issued to investors. And these are precisely the transactions that should be excluded by these new policies, which bar financing for companies that are “significant” producers of MTR coal.

But we’ve learned that different banks define "significant" in wildly different ways. BNP Paribas blacklists the main companies active in MTR production, including Alpha and Arch. But Crédit Agricole — while its policy looks similar to BNP’s on paper — excludes only those coal mining companies that produce more than 20% of their coal from MTR. In practice, they aren’t prohibited from doing business with any MTR companies at all!

Take action: Will you tell Crédit Agricole Jean-Paul Chifflet to close the bank’s huge MTR loophole?

Crédit Agricole has financed several loan and bond deals for Alpha and Arch — the worst of the worst MTR companies — while BNP Paribas hasn’t done any deals with these two companies since last year. Ironically for Crédit Agricole, financing MTR has not only been bad for the environment and human rights — it’s also been a bad investment. The bank suffered significant financial losses from loans it made to recently-bankrupt MTR miner Trinity Coal.

In contrast to Crédit Agricole, other U.S. and European banks have taken concrete steps away from MTR financing this spring. Last month, JPMorgan Chase published an update of its environmental and social policy framework, stating that they expected to continue defunding companies engaged in mountaintop mining. And in the U.K., Royal Bank of Scotland (RBS) published a mining policy update prohibiting deals with the main MTR producers. Unlike Crédit Agricole’s new policy, these policy changes at JPMorgan Chase and RBS have teeth: both banks will stop financing top MTR producers, including Alpha and Arch.

Today, our allies went straight to Crédit Agricole’s annual shareholder meeting to tell the bank’s CEO and board close its massive MTR loophole, and stop funding Alpha and Arch.

Take action: We have Crédit Agricole's attention — will you add your voice?

Yann Louvel, Climate and Energy Campaign Coordinator, BankTrack
Ben Collins, Research and Policy Campaigner, Rainforest Action Network


The Top 20 Climate Killer Banks

Bankrolling Climate Change coverA new report titled “Bankrolling Climate Change” calls out the top 20 banks that are financing the dirty coal industry. The top three “climate killers” will not come as much of a surprise: JP Morgan Chase, Citi, and none other than Bank of America top the list with $22 billion, $18.27 billion, an $16.79 billion invested in coal since 2005, respectively. As officials from around the world are assembling in Durban, South Africa to discuss ways to combat climate change, banks around the world are busy trying to figure out how they can profit off of making the climate crisis worse. In fact, between 2005 — the year the Kyoto Protocol went into effect — and 2010, funding for coal nearly doubled. Yes, you read that right: As the world’s leaders have been trying to get their act together and deal with the most urgent existential crisis humanity has ever faced, the biggest banks in the world have been busy sinking as much money as they can into the single largest cause of that crisis (emissions from coal-fired power plants are the biggest source of man-made carbon pollution). As the report notes, these banks are not unaware of the climate crisis. It’s just that they see it more as an opportunity for some great PR than a problem they have a stake in solving even if it means leaving money on the table. All of the top 20 coal bankrollers have made climate commitments that are drastically contradicted by where they’re actually investing their money. JP Morgan Chase claims it’s “Helping the world transition to a low-carbon economy”, for instance. Citi holds itself out as the “Most innovative bank in climate change” — which sounds more like Citi is gunning for Chase’s number one spot than trying to help solve the climate crisis, but who am I to quibble with how Citi chooses to word its greenwash. Bank of America has declared that “The most formidable challenge we face is global climate change.” A fittingly purposeless statement, given that BoA has invested $4.3 billion in the US coal industry, making it the single largest underwriter of America’s coal problem. Here is a chart showing which banks made the top 20, and the amount they’ve invested in companies that are polluting our communities and wrecking our climate:
Bank in billion Euro   Ranking
JP Morgan Chase 16,540 1
Citi 13,751 2
Bank of America 12,590 3
Morgan Stanley 12,117 4
Barclays 11,514 5
Deutsche Bank 11,477 6
Royal Bank of Scotland 10,946 7
BNP Paribas 10,694 8
Credit Suisse 9,495 9
UBS 8,217 10
Goldman Sachs 6,770 11
Bank of China 6,323 12
Industrial and Commercial Bank of China 6,182 13
Crédit Agricole / Calyon 5,637 14
UniCredit / HVB 5,231 15
China Construction Bank 5,110 16
Mitsubishi UFJ Financial Group 4,980 17
Société Générale 4,742 18
Wells Fargo 4,523 19
HSBC 4,432 20
Data provided by Profundo

An international coalition of NGOs came together to release this groundbreaking report, including urgewald, a German environmental organization; groundWork and Earthlife Africa Johannesburg, two South African social and environmental justice organizations; and BankTrack, an international network. RAN contributed research to the report. A full copy of the study with a ranking of all the researched banks can be downloaded here. The underlying data for this research were provided by Profundo economic research. They can be found here.

Another European Bank Voices Risks of Financing Coal Plants

BNP Paribas RAN is challenging the largest U.S. banks to address their financing of coal power and we're concerned that they are falling behind their European competitors. Last week, French banking giant BNP Paribas released its new corporate social responsibility (CSR) policy on coal power. (Those of you who enjoy reading bank statements can check out the policy in full here.) BNP is the 4th European bank to issue a policy on the issue of coal power, following in the footsteps of WestLB, HSBC and Société Générale. Here are RAN's key take-away points: Context: The policy statement begins with a lengthy preamble about coal playing a significant role in the global energy mix and a key contributor to climate change. Crucially, the bank states that “it is essential that any country/company developing its coal fired power generation capacity meets essential requirements regarding safety, security and protection of the environment for future generations”. I fully agree. The scope of BNP’s policy is worldwide construction, including expansion and upgrading of all Coal-Fired Power Plants (CFPPs). Additionally, the policy applies to CFPP companies, defined as “utility companies for which coal accounts for >30% of their total power generation”. This goes above and beyond the Carbon Principles (a document endorsed by six U.S. and Swiss banks) which apply only to new CFPP construction and only to project financing. I am pleased to see that this policy applies to all financing activities offered by the bank  (lending, debt and equity capital markets, guarantees and advisory work, etc). The policy states expected compliance with all existing national and international laws and regulations, plus BNP’s additional criteria. This includes the commitment that BNP will evaluate the coal project to establish whether a national commitment to reduce Greenhouse Gas emissions exists. This is not a mandatory requirement however, so there is nothing here that would prevent BNP from financing a CFPP in a country without such a commitment, for example, the U.S. Carbon Intensity Standard: HSBC was the first bank to include a carbon intensity standard in its coal policy. BNP matches HSBC's commitment by stating that it will only finance CFPP projects with a CO2 intensity standard below 550 gCO2/kWh for High Income countries, and goes beyond HSBC’s commitment by stating below 660 gCO2/kWh for other countries. These policies both fall far short of the UK’s White Paper on Electricity Market Reform published in July 2011, which proposes an EPS of equivalent to 450g CO2/kWh (at base load) for all new fossil fuel plants. Coal SmokestackCarbon Capture and Sequestration (CCS): It is currently fashionable for coal plants to be described as “CCS Ready,” which is a somewhat confusing label for a technology that has yet to be proven at the scale of coal plant this policy refers to. BNP thinks this should include: A CCS-Ready study, estimated costs, potential for a pipeline, and storage areas. This definition comes from the Global CCS Institute, a body that exists to promote the expansion of CCS, which explains why that definition is so vague and "catch-all". CFPP Companies: The BNP policy stipulates that it will only lend to companies that have good track records on safety, that disclose emissions data, that are not involved with severe controversy, and that have a Co2 emission reduction plan, evidencing a decreasing trend over a 5-year period. This section of the policy is a giant loophole. Instead, BNP Paribas should, at a minimum, require CFPP companies follow the same standards for updating and retrofitting their existing coal fleet as those that are stipulated in this policy for project finance. Disclosure and Follow-Up: BNP has made this policy publicly available on its website and states a commitment to regularly review and update it. The bank also welcomes constructive feedback but has no commitment to report on the implementation of its policy. Conclusion: I'm encouraged to see another major European bank start to take the issue of existing Coal Fired Power Plants seriously beyond the scope of project financing, but this policy contains loopholes big enough to drive a bulldozer through. The stronger criteria in the CFPP Project section is undermined by real lack of substance in the section concerning CFPP Companies. Nonetheless, this policy is years ahead of anything an American bank has published. Get with the times, U.S. banks!

Banks Ranked and Spanked on Tar Sands

[caption id="attachment_5586" align="alignleft" width="250" caption="Illustration by Stefan Lorant"][/caption] As an ode to the  "rank 'em and spank 'em" strategy coined by our outgoing Executive Director Mike Brune, we proudly present the following roster of international banks backing expansion in the tar sands. The table below is based on credit extended underwritten by each bank to companies operating in the tar sands since 2007 according to Bloomberg. Restrictions at Bloomberg now prevent us from publishing deal-by-deal details to the web, but are available upon request if you leave your email in the comments. Each of these banks received letters from RAN, IEN and BankTrack late last year requesting information about how they are addressing the damage caused by tar sands development. Responses (or lack thereof) will help us identify which banks are serious about responsible banking, and which may need more convincing. Responses received to date are also linked in the table after the jump. UPDATE: There's been some questions about how these numbers are derived.  We have answers, following the table.

Rank Bank Response to RAN Loans (Million USD)*

1 RBC Yes $16,903

2 JP Morgan Chase No $13,895

3 Citi Yes $12,775

4 TD Securities Yes $12,043

5 CIBC No $10,467

6 Bank of America Yes $10,101

7 RBS No $7,544

8 Scotia Bank Yes $4,685

9 BMO No $4,467

10 Wells Fargo No $2,176

11 Barclays No $1,450

12 Société Générale No $936

13 HSBC Yes $667

14 BNP Paribas No $261

15 Intesa Sanpaolo No $250

16 Sumitomo No $186

17 Calyon No $119

18 ING Yes $119

19 KBC No $119

20 Mizuho No $111

21 Credit Suisse Yes $67

22 ANZ No $44

23 Mitsubishi UFJ No $44

24 Rabobank Yes $44

25 WestLB Yes $44

26 Standard Chartered PLC No $44
*Totals are based on underwriting league tables reported by Bloomberg. Totals are derived from loans to companies with significant operations in the tar sands. Specifically the companies listed below. Totals may not reflect actual lending. Totals represent the full value of loans where the bank acted as lead book-runner (also called managing underwriter, lead manager, etc...) . Where the bank was one of multiple lead book-runners, value is awarded pro-rata.  Here's the details from Bloomberg (look under "fixed income eligibility criteria"). Athabasca Oil Sands Corp Baytex Energy Trust Bonavista Energy Trust BP plc Bronco Energy Ltd Canadian Natural Resources Ltd Canadian Oil Sands Trust CanWest Petroleum Corp Cenovus Energy Inc Chevron Corp China National Petroleum Corp Connacher Oil & Gas Ltd ConocoPhillips Devon Energy Corp Enbridge Inc EnCana Corp Enerplus Resources Fund Exxon Mobil Corp Harvest Energy Trust Husky Energy Inc Imperial Oil Ltd Inter Pipeline Fund Kinder Morgan Energy Partners LP Koch Resources LLC Korea National Oil Corp Marathon Oil Corp MEG Energy Corp Mocal Energy Ltd Murphy Oil Corp Nexen Inc Nippon Oil Corp Occidental Petroleum Corp Oilsands Quest Inc OPTI Canada Inc Paramount Resources Ltd Pembina Pipeline Income Fund Pengrowth Energy Trust Penn West Energy Trust Petrobank Energy & Resources Ltd Petro-Canada Royal Dutch Shell plc Sinopec Group StatoilHydro ASA Suncor Energy Inc Syncrude Canada Ltd Total SA TransCanada Corp UTS Energy Corp

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