5mUK Banks still lending to oil and gas giant BP – despite climate pledges
A joint investigation from Channel 4 News and the Bureau of Investigative Journalism has found that the UK bank NatWest is continuing to lend to the oil and gas company BP, despite having led the way on net zero banking with a public pledge to only work with companies that have plans that align with the Paris Climate Agreement.
Critics say BP does not.
UK banks are continuing to help oil and gas companies borrow money, potentially jeopardising their own climate commitments, Channel 4 News and The Bureau for Investigative Journalism can reveal.
One of those revealed to be helping provide cash for oil and gas giant bp is NatWest, which was the lead sponsor of COP26 in Glasgow in 2021. It’s a major investor in renewable energy and says that fossil fuels are a small part of its projects.
Since 2021 it has promised to not lend to oil and gas companies unless they have a “credible transition plan” in line with the 2015 Paris Agreement, which pledged to keep global temperature rises below 1.5 degrees celsius.
The International Energy Agency has warned that the goals of the Paris agreement are incompatible with development of new oil and gas projects.
But a joint investigation with The Bureau of Investigative Journalism has found that NatWest, alongside other UK banks, continues to lend to bp. It helped arrange a £400 million bond in 2023, and even today [13 November] was involved in helping secure financing for bp.
Kelly Shields, campaign manager at Share Action, told us: “NatWest said in their policy that they won’t finance oil and gas majors except for the caveat if they have a credible transition plan. If [bp] are expanding oil and gas and they have no plans to stop doing that, we don’t think that that plan is credible.”
The oil and gas company has scaled back its climate commitments, last year downgrading a pledge to reduce emissions by 40% in 2030, to just 20% by the same year. Analysts expect that to decrease again.
bp has also announced it is expanding production of oil and gas in a number of sites over the world, including in the Gulf of Mexico, Iraq and even just off the shore of Baku, Azerbaijan, where COP29 is currently underway.
One site, the Shafag-Asiman gas field, less than 100 miles from Baku, is estimated by some to contain 500 billion cubic metres of gas, which if burnt could result in a billion tonnes of carbon entering the atmosphere. bp says no decision has been made on the development of the block and it has not made its own estimate of its contents.
Mike Coffin, head of Oil and Gas and Mining at the climate analysts Carbon Tracker, says: “The IEA is very clear, there is no room within a 1.5 degree carbon budget for any new oil and gas projects.”
Asked if bp had a credible transition plan, he told Channel 4 News: “Right now, we would say no. Ultimately for an oil and gas company, if they’re continuing to develop new projects that are not compatible with Paris goals, it’s very hard to see how that company can be considered Paris-aligned.”
A bp spokesman told us: “bp’s ambition is to be a net zero company by 2050 or sooner and to help the world get to net zero. We believe our strategy is consistent with the goals of the Paris agreement.”
NatWest, which is still part-owned by the taxpayer, is just one of many banks involved in financing bp. It told us it couldn’t comment on individual customers, but a spokesperson said:
“We conducted a review into our relationships with a number of Oil and Gas majors to ensure they had a Credible Transition Plan aligned with the 2015 Paris Agreement.
“Any new financing to Oil & Gas customers is subject to them meeting our risk criteria for the sector and we refute any suggestion that we have not consistently met these publicly published commitments.
“NatWest continues to support companies with their climate transition ambitions, with a target to provide £100bn climate and sustainable funding and financing between 1 July 2021 and the end of 2025.”