On September 13th, the legal charity ClientEarth sent a letter to 17 major international banks that finance Shell and Siccar Point – the two companies behind the Cambo oil field in the North Sea.
The 17 banks (including Barclays, HSBC, Deutsche Bank and Morgan Stanley) have all made climate commitments through the Net-Zero Banking Alliance (NZBA) or the PRB’s Collective Commitment on Climate Action (CCCA), yet their clients are planning to operate a new oil field to 2050 and potentially beyond. Those plans are contrary to the best available science and decarbonisation scenarios that say there must be no new oil and gas fields approved for development if we are to stay below the 1.5°C warming threshold.
Client Earth's letter challenges these banks and their directors on how their existing and any future financial or advisory services would be consistent with their net-zero commitments, fiduciary duties, regulatory requirements to manage climate risk (including litigation risk), obligations to engage with clients on climate, and shareholder expectations, in light of Shell and Siccar Point’s Cambo development plans. This is the first time major banks have been brought into the controversy around Cambo and could lead to increasing pressure on the sources of funding for the project.
The full list of the banks involved in financing or advising Shell and Siccar Point Energy are: Bank of America, Barclays, BNP Paribas, BPCE/Natixis, Citi, Crédit Agricole, Credit Suisse, Deutsche Bank, HSBC, ING Bank, Lloyds, Morgan Stanley, Banco Santander, Société Générale, SpareBank 1 Markets, Standard Chartered and UBS.
Prof Peter Newell, a researcher of politics and environmental issues at the University of Sussex, said ClientEarth was “right to draw attention to the complicity and hypocrisy of leading banks”.
“As recent protests in London have highlighted, many of these UK-based banks have a global responsibility and, as host of this year’s critical Cop summit, we can’t allow them to keep funding the climate crisis,” he told The Independent.
“It begs the question what the Net-Zero Banking Alliance will do about members who are blatantly ignoring the goal to align their lending and investment portfolios with net-zero emissions.”
Jamie Sawyer, a lawyer at ClientEarth, said, “You cannot claim to be transitioning to net zero, while at the same time supporting clients that are spearheading a risky oil and gas project clearly at odds with net-zero goals. We challenge the directors of every bank that is enabling the Cambo project to justify such hypocrisy.”
Tessa Khan, an environmental lawyer and founder of the oil and gas campaign group Uplift, said UK banks were guilty of “pre-Cop corporate puff” designed “to persuade us they’re taking the climate crisis seriously. They’re providing critical backing to get Cambo off the ground, despite knowing we need to keep the oil in the ground if we’re to have a chance of limiting warming to safe levels,”