BNP Paribas has been hit with the first-ever climate lawsuit to be filed against a commercial bank, the French NGOs behind the action have announced – a move that the bank has dubbed as regrettable.
Oxfam France, Friends of the Earth France and Notre Affaire à Tous French issued a formal notice last October, threatening to take legal action if the bank should fail to comply with France’s 2017 duty of vigilance law, which states that financial institutions and large corporations have a legal responsibility for the social and environmental impacts of their business activity.
The trio have now confirmed that they are suing the banking giant.
A spokesperson for BNP Paribas told Responsible Investor that it “regrets” the NGOs’ decision to “engage in litigation rather than dialogue”.
In a letter seen by RI, the bank responded to the NGOs in January, defending its position on the accusations made by the groups.
The notice sent by the NGOs last October requested that the bank comply with the Paris 1.5C goal by immediately halting support – both direct and indirect – for new fossil fuel projects, in accordance with the French corporate duty of vigilance law, which the NGOs have accused the bank of violating.
BNP Paribas said to RI in October that it was looking into the accusations and defended its position on energy transition, noting its commitments to reduce its credit exposure to oil and gas by 12 percent by 2025 and its exposure to oil by 25 percent by 2025.
In a statement responding to the lawsuit, the bank said: “We are convinced that the ecological transition is the only viable path for the future of our economies. We are focused on our fossil fuel exit path, accelerating financing for renewable energies.”
BNP Paribas stated that “like other major international banks” it is a longstanding financier of energy production, but added: “More than half of our financing for energy production is oriented towards low carbon energies. By 2030, BNP Paribas will have transitioned its financing activities to low carbon energy production by more than 80 percent, well ahead of the transition of the rest of the economy.”
Last month, BNP Paribas committed to reducing its financing of oil and gas extraction and production by 2030, following ongoing pressure from various non-profit and scientific groups.
The French bank has been a member of the Net-Zero Banking Alliance since its launch in April 2021 and a signatory of the Principles for Responsible Banking since its launch in September 2019.
The NZBA declined to comment, stating that it does not comment on individual members or lawsuits.
The PRB had not responded to a request for comment at the time of publication.
Notre Affaire à Tous and Oxfam France were behind a successful lawsuit against the French government, which in 2021 saw a Paris court rule that the state had failed to address the climate crisis and had not kept its promises to tackle greenhouse gas emissions.
Greenwashing risk
In other news, HSBC listed greenwashing as a key risk for its operations, stating in its 2022 annual report that the issue needs to be considered as an “important emerging risk that is likely to increase over time”.
The banking group acknowledged that it could face “reputational damage” – resulting from climate action or inaction, or a perception that the bank has misled stakeholders – which could affect its access to capital markets.
“To reflect this, our climate risk approach has been updated to include greenwashing risk, and guidance has been provided to the first and second lines of defence on the key risk factors, and how it should be managed,” HSBC’s report stated.
In October, UK advertising watchdog the Advertising Standards Agency (ASA) warned banks to fall in line on their climate advertising after it banned two ads from HSBC in a precedent-setting case.
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