Don't Bank on Coal, demand European NGOs

Published by MAC on 2012-05-29
Source: Statement, Reuters

EBRD investing too much in polluting fuels - study

By Sujata Rao

Reuters

17 May 2012

• Fossil fuels - 48 pct of EBRD energy lending in 2006-11 says Bankwatch
• Urges EBRD to cut coal, other fossil fuel lending; up renewables
• Acknowledges significant boost in renewables lending since 2006

LONDON - The European Bank for Reconstruction and Development is lending excessively to polluting fossil fuel projects, especially coal, undermining its own sustainable energy strategy, NGO Bankwatch said in a report released on Thursday.

Lending to fossil fuel projects, coal, oil and gas, accounted for 48 percent of the bank's energy-related investments between 2006 and 2011, said the report by Bankwatch, an agency that monitors international financial institutions.

"Firstly the EBRD's continued support for fossil fuel projects, starting with coal, needs to be halted," Bankwatch said on the eve of the EBRD's annual meeting.

"Secondly there is a need for an increase in the quantity and sustainability of the EBRD's investments in new renewables."

The EBRD, set up in 1991 to invest in the ex-communist states of eastern Europe, in 2006 unveiled a sustainable energy initiative (SEI) to focus on renewables or energy efficiency projects. The plan was to reduce carbon emissions across the region, considered one of the world's least energy efficient.

The strategy looked set to gather pace in 2007 after the EBRD quit Russia's Sakhalin gas project which was criticised for potentially harming endangered whales' habitat.

Bankwatch praised the EBRD for its efforts but urged it to do more. It noted renewables lending rose to 272.9 million euros in 2011 from 6.8 million euros in 2006 while investment in power sector efficiency quintupled to 394 million in this period.

Bankwatch also said the EBRD had almost quadrupled energy efficiency investments since 2006 to 1.7 billion euros. But it questioned the sustainability of many of these projects, saying some had actually extended the working life of potentially polluting developments such as coal mines.

In response, the EBRD says its involvement raises environmental standards at big projects. Josue Tanaka, EBRD managing director for energy efficiency and climate change, told Reuters the SEI now accounted for a third of EBRD business and the net carbon effect of its activities was negative.

The EBRD last year invested 100 million euros in fossil fuel-based power generation projects but 1.1 billion euros had gone to renewables, Tanaka said, adding: "Since the SEI was launched, we have managed to fulfill our business and development mandate and been able to be carbon negative over this period."

Seeks Phase-Out

The Bankwatch report said of the 6.7 billion euros the EBRD had invested in energy and energy-related sectors, fossil fuels received 3.26 billion euros or 48 percent of funding.

It said 70 percent of EBRD's energy lending goes outside the European Union to countries such as Russia and Ukraine, but the new EU states such as Poland and Hungary account for around 80 percent of its renewables lending.

"A phase-out of fossil fuel lending (by the EBRD) would send a clear signal to those countries which have so far been unenthusiastic about new renewable energy that they should start to take it more seriously," Bankwatch said.

Bankwatch expressed disappointment that the EBRD's new draft mining law did not exclude coal, widely considered one of the most polluting sources of power generation. Lending to coal projects diverts resources away from renewables, it argues.

It said support for coal projects had risen to 262 million euros last year from 60 million euros in 2006. (Editing by James Jukwey)

--

Claudia Ciobanu
Media Officer
CEE Bankwatch Network
+48514399727

---

Société Générale and Crédit Agicole attacked by Friends of the Earth France at Shareholders meeting

Friends of the Earth France press release

24 May 2012

Paris - AGMs of Société Générale and Crédit Agricole shareholders are both held today in Paris.

Friends of the Earth France joins them and takes this opportunity to question these banks' CEOs and shareholders and remind all that the profits of these banks are made at always more expensive human, environmental and climate costs. The NGO demands the end of dodgy investments, particularly in the coal sector, the most climate killer one.

If Crédit Agricole lost 1.5 billion euros in 2011, Société Générale made 2.4 billion of profits. But for Friends of the Earth France, which closely tracks these banks activities, the results are worst by far [1].

Participating in these two AGMs, the NGO joined them with Bob Kincaid, president of the US NGO Coal River Mountain Watch, who demanded explanations to their CEOs for their investments in Mountaintop Removal (MTR), an open-pit mining technique blowing up mountain tops up to 300 meters to reach underneath coal veins.

Crédit Agricole and Société Générale own millions of euros of shares in companies deeply involved in MTR like Alpha Natural Resources, Arch Coal or Consol Energy.

For Bob Kincaid : "The Appalachians are under siege. One of the most beautiful mountains chain in the world is daily attacked by more than 3 000 tons of explosives used by the coal industry to blow our mountains, spread poisonous rains on our communities, make sick and kill our friends, our neighbors, our families. With your investments, you participated to the destruction of more than 500 mountains and to the burying of more than 3,200 kilometers of mountain rivers."

Mountaintop Removal technique has been fought for several years by several NGOs in the US and in the world.

The numerous campaign led towards the banking by the BankTrack network (Rainforest Action Network being one of the US members of the BankTrack network), of which Friends of the Earth France is an active member, have led some banks to adopt sectorial policies in this field.

For instance, Crédit Suisse excludes from its portfolio all the companies that use MTR. But, to this day, no French banks have made steps in that direction!

It is not the first time that these banks are involved in such dodgy deals. Crédit Agricole and Société Générale are indeed already involved in coal power plants projects Kusile and Medupi in South Africa.

This last project will emit 25 million tons of CO2 per year (the equivalent of 5% of all French yearly emissions) and it has been created mostly to answer the industrial sector needs, thus mainly foreign mining companies, for exports. Crédit Agricole was also awarded the Pinocchio prize for this project in 2010.

"Even the International Energy Agency recognizes that the situation is critical", explains Ronack Monabay, Friends of the Earth France campaigner. "The IEA has stated that to have a chance to achieving the 2 degrees scenario to fight climate change, it is needed that all energy infrastructures built after 2017 be carbon neutral. It is thus urgent to end investments in coal immediately that is what we ask banks to do".

Yann Louvel, climate and energy campaign coordinator for the BankTrack network concludes :

"While Société Générale boasts itself for its "team spirit" and Crédit Agricole claims "It's time for green banking", one can only be struck by the gap between this talk and reality since both of them are in the top 20 climate killer banks in the world [1].

Instead of systematically "greening" their activities, French banks should put in place a moratorium on funding new coal fired power plants, and support instead opportunities in energy efficiency and in the renewables sector".

[1] For the banks dodgy investments, read the "Bankrolling Climate Change" report which presents the top 20 climate killer banks: BNP Paribas ranks 8th with 10.7 billion euros granted to the coal industry, Crédit Agricole ranks 14th with 5.6 billion euros and Société Générale is 18th with 4.7 billion euros. The complete report is available here ;

http://www.banktrack.org/download/bankrolling_climate_change/climatekillerbanks_final_0.pdf

--

About Friends of the Earth France

Friends of the Earth campaigns for sustainable and just societies and for the protection of the environment, unites 30 national organisations with thousands of local groups and is part of the world's largest grassroots environmental network, Friends of the Earth International. Friends of the Earth is a member of Bank Track

About BankTrack

BankTrack is the global network of civil society organisations targeting the operations and investments of large, international operating commercial banks. Our mission is to promote fundamental changes in the way these banks operate so that they act at the service of society, preserve the ecological well-being of the planet and help offer a decent life free of poverty and repression for all people. As a prerequisite for this, banks must operate fully transparent and be accountable for their activities to all their stakeholders and to society at large.

Further information or interviews:
Ronack Monabay, 06 38 89 81 05

FRIENDS OF THE EARTH-
2 B rue Jules Ferry
93100 Montreuil, France
http://www.amisdelaterre.org