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BP has been rowing back on renewables for years. So why was it helped by ‘net zero’ banks?

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Original article by Rob Soutar republished from TBIJ under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Oil companies’ move to double down on fossil fuels should come as no surprise to anyone – not least its financers

Last week, BP’s CEO Murray Auchincloss said his company had gone “too far, too fast” in its plan to transition away from fossil fuels. BP still says it aims to be a net zero company by 2050 but it will now take a different path to the one it set out in 2021 … doubling down on fossil fuels in the meantime.

Perhaps the move shouldn’t have come as a surprise. After all, BP is a commercial enterprise with a responsibility to deliver returns for its shareholders. And since Russia’s invasion of Ukraine, which led many countries to prioritise energy security over long-term sustainability, oil and gas have remained reliably lucrative.

What’s more, the company made a similar announcement two years ago, saying it would be ramping up its investments in oil and gas.

But if BP had indicated such a significant change in direction so long ago, how did it continue to raise billions from banks that said they’d only do business with “net zero” companies?

Milestone moment?

At the 2021 climate talks in Glasgow, a number of the world’s leading banks made landmark pledges: to slash the footprint of their own operations and, crucially, the emissions of their lending and investment portfolios.

It was hailed as a watershed moment. In theory, the vast stockpiles of money that had supported fossil fuel expansion would now be cut off for companies without net zero ambitions. The same year, the International Energy Agency warned that there must be no new oil and gas projects if the world is to reach net zero by 2050.

Yet throughout 2023, after it said it would invest significantly more in fossil fuels, BP raised more than $5bn with help from “net zero” banks including NatWest, HSBC and Barclays.

The deals illustrate a core problem with the banks’ net zero commitments. A key condition for companies they agreed to do business with was the existence of a “credible” transition plan. But it wasn’t always clear how the banks were assessing that credibility.

Even before Auchincloss’ announcement last week, the world-leading Grantham Research Institute assessed the credibility of oil and gas companies’ transition plans – and found that BP’s fell well short.

That lack of clarity on what was “credible” left the banks with enough wriggle room to maintain relationships with huge fossil fuel companies.

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And those relationships have proved profitable. Since May 2021, global banks that have committed to net zero have poured almost $1 trillion into companies pursuing expansion of oil and gas projects that would push the world beyond its survivable limits.

Looking long-term

The policy environment has changed since Glasgow, when both fossil fuel companies and banks launched net zero targets. BP is not the only company of its kind to have “reset” its core business to oil and gas. But critics say that recent moves to boost fossil fuels and ensure quick returns are alarmingly short-sighted.

In the UK, the costs of getting to net zero are cheaper than was anticipated just five years ago, according to a recent report by the Climate Change Committee. And in a low-carbon economy, fossil fuels could nosedive – leaving the oil and gas fields currently in development as “stranded assets” with little value.

But crucially, the banks face considerable risks too. Their previous promises to work only with clients committed to the transition were made for a reason: they were feeling the pressure from climate-conscious investors.

If the banks are found to have broken these promises, they could well be held to account by regulators – not to mention see their credibility shattered in the eyes of their investors.

Reporter: Rob Soutar
Deputy editor: Chrissie Giles
Editor: Franz Wild
Fact checker: Ero Parksakoulaki
Production editor: Alex Hess

TBIJ has a number of funders, a full list of which can be found here. None of our funders have any influence over editorial decisions or output.

Original article by Rob Soutar republished from TBIJ under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. Corrected a reference to “oil company’s” in the subheading in this version.

Experienced climbers scale a rock face near the historic Dumbarton castle in Glasgow, releasing a banner that reads “Climate on a Cliff Edge.” One activist, dressed as a globe, symbolically looms near the edge, while another plays the bagpipes on the shores below. | Photo courtesy of Extinction Rebellion and Mark Richards
Experienced climbers scale a rock face near the historic Dumbarton castle in Glasgow, releasing a banner that reads “Climate on a Cliff Edge.” One activist, dressed as a globe, symbolically looms near the edge, while another plays the bagpipes on the shores below. | Photo courtesy of Extinction Rebellion and Mark Richards
Greenpeace activists display a billboard during a protest outside Shell headquarters on July 27, 2023 in London.
Greenpeace activists display a billboard during a protest outside Shell headquarters on July 27, 2023 in London. (Photo: Handout/Chris J. Ratcliffe for Greenpeace via Getty Images)
Neo-Fascist Climate Science Denier Donald Trump says Burn, Baby, Burn.
Neo-Fascist Climate Science Denier Donald Trump says Burn, Baby, Burn.

Continue ReadingBP has been rowing back on renewables for years. So why was it helped by ‘net zero’ banks?

Treasury minister: Lobbyists are ‘huge and important part’ of government plans

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Original article by Ethan Shone republished from OpenDemocracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

The Treasury is at the centre of a move to refocus the government’s agenda on ‘growth at all costs’
 | Leon Neal/Getty Images

Exclusive: Government is inviting lobbyists and their clients to play a major role in the deregulatory agenda

“Growth comes from business, not the government.”

That was the message a government minister delivered to hundreds of corporate lobbyists, including those representing banks, arms companies and pharmaceuticals, during a webinar this morning.

Lord Livermore, the financial secretary to the Treasury, made the comments at the online event, which was the first in a series aimed at encouraging lobbyists to play a major role in the government’s ‘growth at all costs’ agenda.

In the call, which openDemocracy attended, Livermore made clear that Number 10 sees this agenda as being driven by corporations, while the government is a secondary actor that “work[s] in partnership with business”.

Also present among the 700 attendees were lobbyists representing tech firms, energy giants and consultancies, and those working for agencies including Hanbury, Headland, Lexington, Brunswick, Cavendish and Grayling.

These people and their clients are a “huge and important part” of the government’s plans, Livermore said, stressing that ministers are “really keen to draw on… the expertise that exists within your organisations and your clients”.

He added that the government’s focus is on getting rid of “stifling regulation that has for too long held business back” and “removing barriers to growth that we, in partnership with business, identify”.

The treasury minister also discussed Great British Energy’s role in “derisking investment” and providing capital for public-private partnerships, to make renewable infrastructure investment more attractive to the market.

While the government has been unapologetic about its outreach to business as a means to drive growth, Labour’s critics say an ever-closer relationship with lobbyists only heightens the impression of a government that does not have an agenda of its own.

Speaking to openDemocracy after the call, Green Party deputy leader Zack Polanski said: “With inequality rife, the government should be listening to the people who keep our country running and those suffering, not hosting desperate mass Zoom calls with arms dealers and oil giants.”

Cutting red tape

Setting out the government’s priorities, Livermore put a particular focus on achieving major reform to the planning system to encourage more commercial and infrastructure projects, and getting rid of regulations that “stand in the way of businesses investing”.

Livermore talked up the recent ousting of the head of the competitions regulator and his replacement with a former Amazon executive as evidence that the government is taking seriously its deregulatory agenda.

He also mentioned the recent push for regulators to submit proposals for growth and said Labour’s National Wealth Fund will “help catalyse private investment into sectors where at the moment, perhaps there’s a too high degree of risk”.

“We can use the National Wealth Fund to help derisk some of those investments,” said the minister. Economists describe this process as the state stepping in to improve the private returns on infrastructure assets.

Livermore continued that the fund could be used to “guide investments, particularly into the kind of clean energy investments of the future that we want to see”.

The government-lobbyist calls are being led by a new partnerships team in No 10 fronted by James Carroll, who has previously worked for the party on external relations and business engagement.

Also on the call was a senior executive at Anacta UK, described by The Times as the “first Starmerite lobbying firm”, and a banking lobbyist who is also involved in the running of Labour in the City, a group which convenes Labour supporters who work in financial services.

Lobbyists were able to submit questions during the call. One criticised “some parts of the business community” which have been “vocally critical about the government’s handling of the economy so far,” describing it as “unhelpful”.

They then asked: “How can firms who don’t want to talk down the UK but would rather promote a more positive narrative about the many opportunities open to British businesses best work with the government to do so?”

This prompted Carroll to quip: “I promise I haven’t planted that question.”

Carroll then rounded out the call by reiterating the importance the government places on developing this relationship with lobbyists.

“Just to emphasise,” he said, “your clients [and] your expertise is critical to delivering these ambitious national missions the prime minister has set out and the chancellor reiterated this week.”

Polanski, the Green’s deputy leader, said the plans to derisk investment “amounts to privatising the rewards and socialising the risks”.

He added: “Regulation exists for a reason, Grenfell stands as a towering reminder of lives lost and the total failure of standards.

“This isn’t growth for the many, just more wealth for the super-rich while the rest of us are told to look up at their private jets and wait for the trickle down.”

Original article by Ethan Shone republished from OpenDemocracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

Continue ReadingTreasury minister: Lobbyists are ‘huge and important part’ of government plans

‘Greenwashing’ banks raised 1 trillion dollars for fossil fuel giants

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Original article by Josephine Moulds republished from TBIJ under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

NatWest among several banks in ‘net zero’ alliance continuing to support the fossil fuel industry

At a glance

  • Banks with net zero pledges helped raise $1 trillion for companies expanding fossil fuels
  • Among them is NatWest, which may have broken climate pledge by funding BP
  • BP is developing a ‘carbon bomb’ in Azerbaijan, host of COP climate talks

Less than a hundred miles from where world leaders are discussing how to meet their climate pledges, BP is drilling for gas.

The Shafag-Asiman project, a sprawling gas field off the Azerbaijani coast, could inject more than 1 billion tonnes of carbon into the atmosphere. That is more than the UK would emit over three years, striking a major blow to efforts to slow down global warming.

BP has said it intends to invest heavily in new oil and gas fields in the coming years. But it would be unable to pursue these dirty projects without billions in support from big banks. NatWest, for one, helped BP raise almost $500m last year in an apparent breach of its climate commitments.

Banks will be in focus at Cop29, currently underway in Baku, Azerbaijan, as world leaders discuss how to raise trillions of dollars for countries suffering the effects of climate change.

Although talks are unlikely to address their continued support for dirty energy, more than 140 banks worldwide have pledged to cut emissions associated with their lending and investments to almost zero by 2050.

In May 2021, the IEA, the global body coordinating countries’ energy policies, sounded the alarm. Any new oil and gas developments would make it inevitable that temperatures would rise by more than 1.5 degrees. In other words, they would devastate the planet.

https://flo.uri.sh/visualisation/20019523/embed

Meanwhile, at BP’s Shafag-Asiman field, engineers were celebrating after finding fossil gas several thousand metres under the seabed – a new discovery that could significantly increase its output from the region. And the bankers were preparing to raise billions more for BP.

That’s not all. Since May 2021, global banks that have committed to net zero have poured almost $1 trillion into companies pursuing expansion of oil and gas projects that would push the world beyond its survivable limits. Taken together these projects would produce almost seven times the annual emissions of the US.

“It’s indefensible,” said John Lang, founder of the Net Zero Tracker, which evaluates big companies’ green plans. “There’s no way we can meet the temperature goals of the Paris Agreement if we continue financing the exploration of oil and gas.”

He said banks with net zero commitments covering direct and indirect emissions could not fund oil and gas expansion. “It’s greenwashing, plain and simple.”

NatWest said it could not comment on specific customers. It said it had conducted a review into its relationships with a number of oil and gas companies “to ensure they had a credible transition plan aligned with the 2015 Paris Agreement”. It refuted the suggestion it had not met its public commitments.

BP said it is aiming to be a net zero company by 2050 or sooner and believes its strategy is consistent with the goals of the Paris Agreement.

‘Net zero’

It was at Cop26 three years ago that a number of major banks first pledged that by 2050 they would cut almost all the emissions from their lending and investments to zero and invest in financial products to offset the remaining emissions – which has come to be known as “net zero”. NatWest, for instance, promised to stop funding companies that do not have a credible plan to shift their business away from fossil fuels. Its support for BP suggests it may have broken that promise.

BP reported record profits in February last year and promptly announced it would scale back its climate commitments and increase investments in oil and gas. It then enlisted the help of NatWest and a host of other ‘net zero’ banks to raise a total of $5.3bn in 2023 – and went on to invest $4.8bn in its oil and gas operations in the first half of this year.

In April, BP announced the first oil to be extracted from a new platform off the coast of Azerbaijan, which is expected to be operating until at least 2049, just a year before the world is supposed to have cut its dependence on fossil fuels.

https://flo.uri.sh/visualisation/19957754/embed

The world-leading Grantham Research Institute assessed how credible the largest oil and gas companies’ transition plans were. It said BP’s fell short by a significant margin.

Many of the world’s biggest banks trumpet their net zero pledges to bolster their green credentials. But Nigel Topping, a member of the UK’s Climate Change Committee, explains that even when banks commit to cutting emissions associated with their financing in line with net zero, “it doesn’t stop them from financing companies who are continuing to expand [oil and gas production]”.

More than 180 companies expanding fossil fuel production have raised money from ‘net zero’ banks since May 2021, according to an analysis of data from the environmental campaign group, Rainforest Action Network. Their expansion projects are spread across the globe, from ConocoPhillips in the Arctic circle to Petrobras near the mouth of the Amazon river, and Shell in the UK’s North Sea.

A TBIJ analysis of the Global Oil and Gas Exit list, compiled by environmental campaign group Urgewald, shows these expansionary projects could produce almost 90 billion barrels of oil equivalent, which scientists say should stay in the ground. Around half of that is oil and half is gas, according to Urgewald, and calculations suggest it could generate more than 34 billion tonnes of CO2 emissions when burned.

Topping said: “The fundamental problem is that the transition is not driven by regulation … The only people who can make companies change are regulators, and the regulators are letting us down.”

Lead image: Offshore oil rigs at Baku Bay, near Baku, Azerbaijan. Anatoliy Zhdanov / Sipa US / Alamy Stock Photo

Reporter: Josephine Moulds
Environment editor: Rob Soutar
Deputy editors: Katie Mark & Chrissie Giles
Editor: Franz Wild
Production editor: Alex Hess
Fact checker: Somesh Jha

TBIJ has a number of funders, a full list of which can be found here. None of our funders have any influence over editorial decisions or output.

Original article by Josephine Moulds republished from TBIJ under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Continue Reading‘Greenwashing’ banks raised 1 trillion dollars for fossil fuel giants

Protesters occupy City Of London insurers’ offices demanding they reject climate-wrecking projects in UK and Africa

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Extinction Rebellion occupy Lloyds of London insurance companies 18 October 2023.
Extinction Rebellion occupy Lloyds of London insurance companies 18 October 2023.

Ten City of London insurance companies are targeted by activists calling on them to stop insuring West Cumbia coalmine and East Africa Crude Oil Pipeline NOW!

Hundreds of protesters occupied City of London offices of ten Lloyd’s of London insurers demanding they rule out insuring the proposed West Cumbria coal mine and the East Africa Crude Oil Pipeline (EACOP).

The occupations started as a huge crowd gathered outside Standard Bank. The protests are in collaboration with Fossil Free London’s “Oily Money Out” mass action – at which Greta Thunberg was arrested yesterday – and in solidarity with Extinction Rebellion Gauteng in South Africa.  In Johannesburg activists were recently met with brutality by security personnel hired by Standard Bank as they peacefully called for dialogue to end the financing of new coal projects.

The protesters marched waving banners saying “Don’t Insure EACOP” and “Don’t Insure West Cumbria Mine” to three high profile buildings including the “Walkie Talkie” where in a coordinated swoop, activists occupied the office foyers of Ascot, Talbot, Chaucer, Markel, Allied World, CNA Hardy, Tokio Marine Kiln, Sirius International and Lancashire Syndicates. The activists are staging a sit-in and refusing to leave.

Insurers from Lloyd’s of London have come under increasing pressure to rule out offering insurance to both the West Cumbria coal mine and EACOP, including protests at offices across the UK with hundreds of students entering the job market refusing to work for them.

Claude Fourcroy, a spokesperson for Money Rebellion said: “We are calling on all the banks and insurers behind the West Cumbria mine and East Africa Crude Oil Pipelines to cut their ties now. Both of these projects will fuel climate breakdown. Lloyd’s of London and the insurers in its market sit at the centre of a web of climate wreckers in the City of London, alongside Barclays and HSBC.”

Community members from Cumbria and Uganda joined the protests, sharing the united call to insurers and banks to stop underwriting fossil fuel projects.  The UK Climate Change Committee warned that the West Cumbria Mine would increase UK’s domestic emissions and make the government’s legally-binding domestic emissions budgets difficult to meet.

The massive 1443 km East Africa Crude Oil Pipeline will wreak havoc on communities, jeopardise ecosystems and water supplies. and eliminate the possibility of Earth remaining habitable. There can be no new fossil fuels anywhere if global heating is to remain under 1.5C.

Scientists say we are dangerously close to crossing the globally agreed threshold of 1.5C this year. Neither project will proceed without financial and insurance backing.

Andrew Taylor, Coal Action Network said: “West Cumbria Mining Ltd wants to dig coal here right up until 2049 – when we’re supposed to have reached net zero by 2050! They’re not looking at the impact of how burning it would damage the climate and nature.  The UK government talks about us having energy security but the truth is, if the mine goes ahead, 85% of the coal would be exported.”

Patience, a youth activist from Fridays for Future Uganda said: “We have gathered here today to demand that insurers cut ties with EACOP. By supporting this deadly fossil fuel project they undermine any climate commitments they have made. People in Uganda are facing human rights violations in the name of this project. This has to end.”

Fossil Free London is simultaneously disrupting the Canary Wharf offices of Total Energies, a majority shareholder in EACOP.

The protests come on the second day of the Fossil Free London “Oily Money Out” protests targeting the Energy Intelligence Forum at the InterContinental Park Lane Hotel in London, where fossil fuel corporations, including Shell, Total and Equinor, are talking to government ministers. The Forum is taking place in the run up to the COP28 Climate Conference, which has already been captured by the fossil fuel industry, with the appointment of Al Jaber, chief executive of the Abu Dhabi National Oil Company (ADNOC) as the COP28 President.

Banner reads Oily Money Out. Protests London 18 October 2023.
Banner reads Oily Money Out. Protests London 18 October 2023.


Joanna Warrington, campaigner with Fossil Free London said: “We can’t allow London to welcome the climate-wrecking elite when droughts, floods, and wildfires rage across the world. London’s banks and finance sector have been ignoring all the warning signs while pouring billions into fossil fuel expansion. Their profit is our loss. Financing new fossil fuel developments is incompatible with a safe future.”

Continue ReadingProtesters occupy City Of London insurers’ offices demanding they reject climate-wrecking projects in UK and Africa