The Snowball Effect
by Diana Best
December 13, 2017
Why more and more banks and major investors are distancing themselves from tar sands.
Yesterday brought another major announcement from one the world’s largest financial providers to move away from tar sands — this time from AXA, a French-based insurance company. In a bold and direct statement from their CEO, they write:
…because oil sands are also an extremely carbon-intensive form of energy and a serious cause of environmental pollution, AXA announced the divestment of over Euro 700 million from the main oil sands producers and associated pipelines, and the discontinuation of further investments in these businesses.
In addition to pledging to divest from 13 tar sands companies, including the three pursuing new tar sands pipelines in North America (KXL, Transmountain, and Line 3), AXA additionally committed to no longer backing and insuring tar sands projects or the major pipeline businesses behind them.
This is the latest HUGE commitment from a major investment institution to defund and divest from controversial tar sands projects — and the momentum is only growing!
This is the 8th major announcement this year from a financial institution, and the 4th in the last week! Let’s break it down:
1. Dutch Bank ING clears its throat…
In early summer, Dutch bank ING clarified their position on tar sands financing by stating outright that they would not be extending any project-level finance to TransCanada’s Keystone XL pipeline, Enbridge’s Line 3 expansion, and Kinder Morgan’s Transmountain pipeline. ING stated climate, environmental, and social impacts among their chief concerns for limiting their financial services to this industry.
2. Swedish pension fund says “YOU’RE OUT”…
AP7, Sweden’s largest pension fund, revised their list of companies that do not comply with the Paris Agreement climate standards in June. The new “blacklist” includes both TransCanada, the company proposing the Keystone XL, and Enbridge, the pipeline builder behind the Line 3 tar sands expansion pipeline near the Great Lakes.
3. 8th largest bank in the world, BNP Paribas, says enough is enough…
In October, French bank BNP Paribas said they “will no longer do business with companies whose principal business activity is the exploration, production, distribution, marketing or trading of oil and gas from shale and/or oil from tar sands.” In addition to committing to end project-level financing for tar sands pipelines, the bank also promised not to provide financing to companies whose primary business includes tar sands.
(They also made a commitment to not fund arctic oil projects either…which is pretty cool too!)
4. US Bank puts their money where their mouth is…
After making commitments last spring to end project-level financing for oil and gas pipelines, including the financing of tar sands pipelines, US Bank took it a step further this November by ending its credit relationship with the pipeline parent company Enbridge.
And here come the French!…Each of the following French banks and lending institutions made commitments this December:
5. Credit Agricole — the 11th largest global bank — commits to no tar sands projects, including pipelines.
6. Société Générale updated their oil and gas policy, as well as their standards on the rights of Indigenous peoples. The end result is that Societe Generale will no longer invest in tar sands projects or production.
7. Natixis also pledges “to no longer finance oil sands oil or companies whose the activity is mainly based on the exploitation of oil from the oil sands.”
And finally, today’s announcement, lucky #8!
This has been a whirlwind year for tar sands financing, and 2018 will be no different. We know that tar sands are devastating for our climate and threaten precious water resources, the environment, and Indigenous rights — it’s clear that there are significant risks in investing in these projects. As more and more people are coming together to oppose these destructive, dirty, and controversial pipelines, the investors bankrolling those projects are feeling the heat. Look at the progress made already!
And yet, the world’s 6th largest bank, JPMorgan Chase, is still dragging its feet on making any commitments around tar sands financing. JPMorgan Chase has a critical decision to make THIS WEEK on whether or not it will continue to extend $1.5 billion of credit loans to TransCanada, the company behind Keystone XL and the most recent pipeline spill in South Dakota.
Together with our partners and allies, we are demanding that JPMorgan Chase stop funding tar sands pipelines or provide any financial services to companies that are pushing tar sands projects.