Every spring, the big oil and gas companies and the banks and insurance companies that finance them hold their annual general meetings. They present the climate plans imposed on them by law to reduce their CO2 emissions. Three weeks after the publication of the third part of the IPCC report on economic transformation to limit global warming and in the midst of war in Ukraine, this new season of General Assemblies takes a unique turn. Interview with Lucie Pinson, co-founder and executive director of the NGO Reclaim Finance, who is following it all closely.
The general meetings of French energy companies and their financiers have started. Do they take into account the latest IPCC data?
Definitely not. For example, Engie shareholders voted 80% in favor of a climate plan that rejects the goal of limiting global warming to a maximum of 1.5°C. The group continues to rely heavily on gas. In connection with the war in Ukraine, he uses shale gas from the USA, whose import contracts he wants to extend by a further nine years in addition to the eleven years already planned. We validate twenty years of shale gas! This brings us to the year 2042, when Europe is supposed to produce no more CO2 electricity by 2035. Engie is completely wrong.
Are there any other reactions from banks or insurance companies?
These General Assemblies are the first to be held since the International Energy Agency (IEA) decreed that we must refrain from any new exploitation of fossil fuels. Their report was published at the end of May 2021 and the financial players had justified not integrating their conclusions. But a year has passed. The IEA report has since been confirmed by that of the IPCC. We hope that financial players will finally take note of all these conclusions and recognize the need to move closer to the goal of zero expansion. We call on them to punish companies that continue to invest in fossil fuels by voting against the renewal of their officers and against their bogus climate plans.
Internationally, to read the third part of the IPCC report, there is no lack of money, it is the flows that are being misdirected. What does that say about the state of green finance?
That is the good news from the IPCC report. All the funds needed for climate change are in place and available. The task now is to increase the inflows to the good solutions and in particular to stop those destined for fossil fuels. Also, not all green financing is as green as it is claimed. Take green bonds (green bonds issued by public actors, among others, in the world market to encourage economic actors to invest in the transition – editor’s note): some are very valid. But when BNP Paribas supports the issuance of a green bond for the development of an airport in Hong Kong, arguing that the buildings are fuel-efficient, there is nothing green about it: we are helping to increase air traffic!
Many investors are now moving towards carbon capture and storage technologies. Are they one of the elements of these fake climate plans?
You can help. Many oil and gas companies rely on offsetting (a mechanism that allows a company to invest, for example, in the reforestation of forests to offset the CO2 emissions caused by its activities – ed.) and technologies for capture and storage of CO2. It can be extremely dangerous. With regard to offsetting, it has been shown that its benefit for the climate is small or non-existent, as long as industry uses it to justify continuing its emissions. We should not be talking about compensation, but about contribution: all these things should be done in addition to efforts to reduce emissions, not as a substitute. The situation is similar with the storage of CO2. It is needed. But the IPCC is very clear: it must be reserved for economic sectors that cannot be fundamentally transformed. This is certainly not the case for the energy sector, and even less so for the power generation sector if it is possible to decarbonize it very quickly.
What are our chances of diverting the financial flows of a system that is essentially uncontrollable?
That’s the problem. Financial actors must be controlled. They can change their operations to some extent on the edge – often in a logic of financial risk prevention, removing from their portfolios the companies most exposed to fossil fuels. But this logic is very slow and does not question the growth and exploitation of resources that radically contradict our climate goals. We will have to regulate; It will also be necessary to ban the funding of certain activities recognized by science as incompatible with meeting our planetary carbon budget. Finally, we must discourage certain practices and encourage others, using the monetary mechanisms of central banks, which are mandated to comply with Europe’s climate targets.
Total will conclude this new season of AGMs at the end of May. What do you expect from this oil company?
Not much. The climate plan, which it will present to its shareholders for consultation, gives gas a high priority, to the point of canceling all efforts to reduce oil emissions. It also authorizes the deployment of disaster relief projects such as that of the EACOP in East Africa (1). After all, Total has just rejected a resolution by its shareholders calling for more transparency about its climate strategy. What can one expect from a group that refuses to account to its own shareholders?