BNP Paribas is taking a step further in financing the transition to a low carbon economy. The Bank will more than double the financing resources allocated to the renewable energy sector, from €6.9 billion in 2014 to €15 billion in 2020. The group has also decided to strengthen its policies for the management of carbon risk.
Jean-Laurent Bonnafé, CEO of BNP Paribas stated:
“It has been calculated that if we want to limit the increase in average global temperatures to 2ºC, only one third of existing fossil fuel reserves can be burnt. The electricity mix currently financed by the BNP Paribas Group, with 23% renewables that is, hydroelectric power, photovoltaic and wind power – and 23% coal-fired power, is already more advanced than the global average mix which, according to the IEA, comprises 21% renewables and 40% coal,”
BNP Paribas is now further strengthening its carbon risk management policies. The Bank has decided that it will no longer finance coal mining activities, whether through direct financing of mining projects or by financing mining companies specialising in coal extraction, unless they have put in place an energy diversification strategy.
BNP Paribas has also made the choice to support the gradual transition to a less carbon-intensive economy in Asia and sub-Saharan Africa. The Bank recognises that climate strategies of individual countries may vary according to their current state of economic development, given that some 1.3 billion people worldwide still do not have access to electricity.
In addition, the Group will only provide financing to power generation companies that have a formal diversification strategy to reduce the share of coal in their power generation mix that is at least as ambitious as that of their host country.
BNP Paribas is also going to include a climate component in its methodology for rating companies and projects financed by the Bank. This means that going forward the group will progressively integrate the use of an internal carbon price in its financing decisions, to reflect the changes brought about by the transition towards sustainable energy and to take into account the associated risks.
Finally, given that energy efficiency has a major role to play in overall efforts to reduce GHG emissions, BNP Paribas is to significantly step up its initiatives in this field. The group will further expand the offers already available to individual customers for the purpose of making home energy efficiency improvements, both through loan plans plus dedicated services and through partnerships with equipment suppliers and installation providers. BNP Paribas also intends to increase its support for companies which devote a significant part of their business activities to finding solutions for reducing energy consumption.