The financial sector has been under intense and sustained pressure from scientists and civil society to divest from fossil fuels over the last few years, as our climate emergency has gathered pace. And this pressure is finally paying off.
The divestment movement has already secured significant victories with an estimated USD 15 trillion now withdrawn from fossil fuel stocks.
And days ago, there was further significant pressure on the industry to act when the world’s energy watchdog, the International Energy Agency (IEA), whose annual World Energy Outlook is used globally to influence trillions of dollars in investment, reiterated its conclusion from May 2021 that no new oil, gas, and coal extraction projects should be approved under a 1.5°C-aligned scenario.
At the time, David Tong, Global Industry Campaign Manager from OCI said that “now the challenge is set for governments and investors. Will they stop approving and funding new oil and gas expansion?”
At least one bank has been listening to the IEA’s challenge. The day after the IEA published the World Energy Outlook, La Banque Postale, a relatively small but progressive bank in France set an international precedent against oil and gas expansion.
La Banque Postale, which was already committed to ensuring that its banking activities achieve net zero carbon emissions by 2040, announced a complete withdrawal from fossil fuels by the 2030. They will also no longer provide financial services to fossil fuel companies and will not invest in fossil fuels.
Philippe Heim, Chairman of La Banque Postale’s Executive Board, said: “Today, we are the first European bank and one of the first financial institutions worldwide to have a decarbonization strategy that is in line with the Paris Agreement.”
Helm added: “The climate emergency requires us to accelerate, which leads us to a complete withdrawal from fossil fuels by 2030 at the latest.”
The move was welcomed by climate campaigners in France. Alix Mazounie, a campaigner at Reclaim Finance said, “with COP26 just days away, a strong signal has been sent to financial institutions in Paris and beyond. This new policy sets a precedent which must be followed by every investor, insurer and bank which claims to be serious in its climate commitments, whether to net-zero or to the Paris Agreement.”
And now with COP26 just days away, it is time for other banks to follow La Banque Postale’s lead.