Atlantic Divide Over Oil, Gas Lending Widens

While debate is raging in the US about climate action, "everything you do in Europe at this moment is through the lens of decarbonization and sustainability," BlackRock CEO Larry Fink said earlier this month. This applies to banks, which in Europe are steadily continuing to tighten their oil and gas policies in significant ways. The latest example is Denmark's Danske Bank, which, beyond existing exclusions on upstream oil and gas projects, will now exclude companies altogether that are engaging in oil and gas expansion in an effort to align with the International Energy Agency's (IEA) controversial net-zero emissions (NZE) scenario. Danske's announcement is "a very important step" because it goes beyond just limiting oil and gas project finance, says non-profit BankTrack's Maaike Beenes. The move reinforces a milestone set last year when the Netherlands' ING established a "new normal" for banks, at least in Europe, as it decided to exclude all — and not only unconventional — upstream oil and gas projects. In less than a year, half of Europe's largest banks took similar decisions, which is significant but "mostly symbolic" because project finance only accounts for a small part of banks' oil and gas business, says activist shareholder ShareAction's Xavier Lerin. "We're now really hoping that like ING last year, Danske Bank will be the new example this year," says Beenes.