Daily ESG Briefing: French banks rule out support for East African Crude Oil Pipeline

The latest developments in sustainable finance

BNP Paribas, Société Générale and Crédit Agricole have announced they will not be financing the East African Crude Oil Pipeline. The 1,445km pipeline is intended to run through Uganda and Tanzania, and will cost over $3.5bn. Barclays, Credit Suisse and ANZ have previously ruled out financing the project, developed by Total, as have the UK’s Export Credit Agency and the African Development Bank. Campaigners say that the oil transported by the pipeline will generate 34m tonnes of CO2 a year, and pose a threat to water supplies and biodiversity across four east African countries.

Nedbank has committed to reaching zero fossil fuel exposure by 2045. In its new energy policy, the South African bank excludes financing for new oil and gas exploration projects and thermal coal mines outside of South Africa. By 2025 it will exclude thermal coal within South Africa and by 2030 financing for any new gas-fired power stations. 

KPMG and the University of Cambridge Institute for Sustainability Leadership have jointly launched a “sustainable investment framework navigator” tool to measure the real-world impact of an investment fund against six themes: climate stability, resource security, healthy ecosystems, basic needs, wellbeing and decent work.

A coalition of 50 companies including ice cream producer Ben & Jerry’s and flavourings company Symrise have called for parts of a proposed German law on mandatory due diligence to be strengthened as it begins its path through the German parliament. The companies welcomed the law, but said it should consistently apply the risk-based approach of the UN Guiding Principles and OECD Guidelines, as well as applying to foreign companies active in the German market and emphasising the rights of affected people in remediation.

US nonprofit Climate Neutral certified 230 businesses in 2020, representing more than $2.3bn in revenue. In order to achieve certification, a business must offset all of its emissions and create a carbon footprint reduction plan. Businesses offset 700,000 tonnes of carbon and a further 125 have committed to becoming certified in 2021.

Major companies could face $283bn in carbon pricing costs, with 13% of their earnings at risk by 2025, according to research from S&P. While 1675 businesses, 85 large investors and 470 cities have committed to the UN Race to Net Zero campaign, many firms are currently aligned with a greater than 3℃ scenario, falling 72% short of Paris-aligned emissions reductions. S&P estimates that $2.4tn investment in clean energy will be needed annually for the next 15 years in order to meet targets. Investment in clean energy in 2019 reached $635bn.

The asset management industry is collectively falling short on diversity data collection, according to a study by LGBT Great and EY. The study found that only 28% of organisations collect pay data in spheres apart from gender, and 83% of organisations are not confident that their collected data would fulfill mandatory ethnicity pay gap reporting.