Societe Generale SA plans to halt lending to some new oil and gas projects as part of an updated strategy unveiled on Monday.
The French bank set a deadline of January to stop supplying financial products and services dedicated to so-called greenfield oil and gas projects. It also plans to phase out exposure to “pure private players” in upstream oil and gas early next year. And SocGen pledged to cut its funded oil and gas emissions by 70% by the end of the decade, from a 2019 baseline.
It is the latest bank to restrict access to capital for companies whose greenhouse gas emissions are causing the most damage to the planet, with BNP Paribas SA and HSBC Holdings Plc taking similar steps. The International Energy Agency has made it clear that stopping the further expansion of fossil fuels is the only way to limit global warming to the critical threshold of 1.5ºC.
SocGen “is opening an encouraging new chapter by finally taking action on oil and gas expansion,” Antoine Laurent, France advocacy leader for Reclaim Finance, said in an emailed comment. It’s still “saving its biggest customers.”
The bank “must condition its support for oil and gas companies like TotalEnergies on the completion of the development of new oil and gas fields,” he said. These steps are necessary to “respond to the gravity of the climate emergency we face”.
Slawomir Krupa, chief executive of SocGen, said on Monday that the restrictions on fossil finance, which are part of a wider strategic review, underpin its aim to be a leader in environmental, social and government finance.
The bank also announced a new 1 billion euro ($1.1 billion) fund that will invest in deals targeting the transition to a low-carbon economy, nature-based solution offerings and “opportunities driven by ‘impact’.
SocGen’s broader corporate strategy, which includes cuts to revenue and profitability targets, disappointed investors and the bank’s shares sank the most in six months.
–With the assistance of Alexandre Rajbhandari and Natasha White.
