Our Take: Financier Flexibility Required

Recent pledges by European banks to continue to tighten lending standards have made it clear their portfolios will have little room for hydrocarbon assets by end-decade. Banks outside Europe, meanwhile, have shown more appetite to finance oil and gas, albeit with increasingly lower operational emissions. As financing parameters evolve, we believe it is important for banks to keep operational emissions in mind when deciding to make categorical exclusions of certain asset types, as broader environmental considerations could risk cutting financing for some of the world’s lowest emitting oil and gas just as consumption is rising.