The Oxfam report: true or false?
The report published by the NGO Oxfam at end November reproached six French banks for financing fossil fuels more than renewable energy. It was followed recently by militant action against Société Générale. We are also regularly challenged by NGOs. This is why it is important for us to provide certain details to help clarify the debate.
The Oxfam research presents a questionable methodological bias in the treatment of energies. Indeed, it groups together all the fossil fuels (coal, oil, and gas) indiscriminately, even though gas is considered by the majority of scientists as a transition energy. Moreover, the research removes hydro power and bio energy (including bagasse-type plant waste, which is very surprising) from the list of so-called renewable energies. Nuclear energy is not mentioned, whereas no scientist today challenges the use of nuclear energy during the transition period. As a result, this methodological scissors effect enables Oxfam to denounce the "reduction in renewable energy financing and the rise of fossil fuel financing" and to demand that banks stop financing 290 companies entirely including the largest French electricity suppliers, even though it is urgent to support them in their energy transition efforts.
The IPCC has demonstrated the link between economic activity and the emission of greenhouse gases, most of which is carbon dioxide. This gas has been produced massively by the combustion of fossil fuels (in transport, heating, energy production etc.) since the advent of the industrial era. The International Energy Agency (IEA) publishes key global energy data annually. In 2017, 81% of world primary energy consumption used fossil fuels. In 1973, this share totalled 86.7% (of which 46.2% for oil alone). The share of renewables is growing, but not as fast as it should. In order to achieve the Paris Agreement’s goal of limiting global warming to "significantly below" 2°C by 2100, all greenhouse gas emissions globally have to be reduced by 40-70% by 2050 (compared to the 2010 level).
Today’s global economy therefore operates with an energy mix that is more than 80% fossil fuels. Reducing greenhouse gas emissions very quickly in a fast-growing world (demographically and economically) is a political and technical challenge. Energy lies at the heart of this challenge: essential to development, it determines our lifestyles and is also the primary source of greenhouse gases. Energy production alone was responsible for 22% of greenhouse gas emissions, compared to 17% for industrial processes, 14% for transportation and 12% for agriculture. The scale of efforts to be made implies that peripheral readjustments will not be enough: there has to be a deep, rapid and gradual transformation of uses and of the energy sector as a whole, that is to say, from raw resource to end use, to achieve a real decarbonisation of the economy and society.
In comparison, CACIB's energy project finance portfolio now mainly involves financing renewable energy projects: we are therefore accelerators of green transformation. Crédit Agricole's strategy is to support the evolution of our models and our counterparties towards a sustainable economic and energy transition in all territories. We are committed to supporting all our clients in the transition to a so-called "low carbon" economy, aligned with the 2°C trajectory of the Paris Agreement. In fact, we are the leading arranger in the world in terms of green bonds, and the carbon footprint of our financing portfolio has decreased by 25%, from 160 million tonnes to 120 million tonnes in 2017.