The Oil and Gas Policy Tracker: a tool to detect greenwashing practices in the finance sector

22 March 2022

Paris, March 22nd, 2022 – Reclaim Finance and more than 15 NGOs launch the “Oil and Gas Policy Tracker” (OGPT). The tool is the first of its kind: it assesses in great detail the oil and gas exclusion policies (or lack thereof) of the 150 biggest financial institutions worldwide. The Oil and Gas Policy Tracker reveals that despite many of the banks, insurers and investors pledging to tackle climate change by restricting support for the oil and gas industry, their policies are too flawed to align their business with their net zero 1.5°C targets. Reclaim Finance and partners call on financial institutions that do not want to be exposed as greenwashers to adopt robust oil and gas policies with clear red lines against oil and gas expansion.

The OGPT scores the oil and gas exclusion policies of top global financial institutions (60 banks, 30 insurers and 60 investors), looking at three key indicators: restrictions on new oil and gas projects, restrictions on companies developing new oil and gas projects, and strategies to phase out oil and gas.

Currently, less than half of the 150 institutions have implemented oil and gas exclusion policies. The OGPT points to a significant number of the heavyweights in the Glasgow Financial Alliance for Net Zero (GFANZ) which still haven’t implemented an exclusion policy on oil and gas, despite their pledge to align their portfolios with 1.5°C.

The Tracker also points to major flaws in existing policies, hindering efforts to tackle oil and gas expansion, in line with what climate science requires in order to stay below 1.5°C.

Only nine financial institutions totally exclude support for all new upstream oil and gas projects, although the IEA’s 1.5°C pathway does not include new oil and gas fields. Policies tend to focus on excluding support only for some unconventional oil & gas such as tar sands, Arctic, fracking and/or ultra deep waters.
Only five financial institutions (partially or totally) restrict support for companies developing new oil and gas projects, despite the critical role played by corporate financing in new oil and gas projects. Most policies focus on restricting direct project support but still enable support at the company level.

More worryingly, close scrutiny reveals that a growing number of financial institutions are making room for major exceptions in the fine print of their policies. For instance:

Only 14 financial institutions have policies on both conventional and unconventional fossil fuels, while 66 have restrictions limited to one or more unconventional sectors.
More and more policies create exceptions for companies with “credible transition plans” or “aligned with 1.5°C by 2050”. They hardly ever include clear redlines against oil and gas expansion and 1.5°C carbon budget overshoot.
Nearly all oil and gas policies include restrictions on the Arctic (54 out of 66). However, the OGPT reveals that these policies are often deeply flawed. For instance, no more than eight financial institutions have adopted the Arctic AMAP definition as their exclusion scope.

“The Oil and Gas Policy Tracker is a tool to detect greenwashing practices in the finance sector. It confirms that despite their net zero pledges, many GFANZ members don’t even have an oil and gas policy. And with one glowing exception, French la Banque Postale, those that do have a policy can still support the development of new oil and gas plans. Despite their climate pledges, they are failing the most basic test for any institution aiming to align their portfolio with 1.5°C. And as Putin’s war on Ukraine reveals, they also make the world more unstable while bankrolling future conflicts” comments Lucie Pinson, Director at Reclaim Finance.

“It’s alarming to see that almost a year after the IEA warned that no new oil and gas fields should be developed, the industry remains on its ruthless expansion course. Over 96% of the companies on our Global Oil and Gas Exit List are still developing new oil and gas assets or exploring for new reserves. The OGPT identifies the financial institutions, which keep on enabling these fossil fuel developers as well as the ones that are ahead of the curve. This work will massively increase the right kind of competition among financial institutions. It constitutes a key component in the toolbox for driving change in the industry!” comments Nils Bartsch, Head of Global Oil and Gas Exit List Research at Urgewald.

“The Oil and Gas Policy Tracker confirms what the Banking on Climate Chaos report numbers reveal year after year: the loopholes in banks’ policies are too big to stop billions from flowing to the oil and gas industry’s expansion plans. We can only hope the forthcoming 2022 edition will serve as a wake up call: banks must address those loopholes and cut off the taps for companies that are still developing new oil and gas projects” comments Alison Kirsch of Rainforest Action Network, co-author of Banking on Climate Chaos 2022, to be released on March 30th.

“Insurance companies have warned about climate risks for almost 30 years and would like to see themselves as climate leaders. Such claims have little credibility as long as only six of the 30 biggest fossil fuel insurers have adopted any restrictions on conventional oil and gas, and only three of them rule out any support for new oil and gas expansion projects” comments Peter Bosshard, Global Coordinator of Insure Our Future.

Reclaim Finance plans to gradually expand the scope of the Oil and Gas Policy Tracker and include 200 more international financial institutions. By the United Nations General Assembly in September, the Oil and Gas Policy Tracker, similarly to the Coal Policy Tool, will score the oil and gas policies of all significant members of the GFANZ.

Oil & Gas Policy Tracker

1. Partners of the Oil and Gas Policy Tracker include: Reclaim Finance, Amis de la Terre France, Insure our Future, Stand Earth, RAN, BankTrack, IIDMA, Urgewald, 350.org Japan, ReCommon, SFOC, ActionAid Denmark, Sierra Club, CEED, Bank On Our Future, Friends of the Earth Finland. The complete list will be available on the website on the day of the release.

2. The link to the website: www.oilgaspolicytracker.org/

3. See complete list in annex 2.

4. 66 of the 150 financial institutions have an exclusion policy. The OGPT scoring system does not take into account due diligence policies, only exclusion policies. More detail on the methodology can be found here: www.oilgaspolicytracker.org/methodology. The key findings do not take into account new policies recently released by APG/ABP, and Swiss Re, currently under evaluation.

5. At the time of the launch, the Oil and Gas Policy Tracker assesses 74 members of the Global Financial Alliance for Net Zero. 20 of them don’t currently have an exclusion policy on oil and gas.

6. According to the IEA’s 2021 Net Zero Pathway: “Beyond projects already committed as of 2021, there are no new oil and gas fields approved for development in our pathway.” According to the UNEP production gap report, based on the 2018 IPCC 1.5°C report, “Global fossil fuel production must start declining immediately and steeply to be consistent with limiting long-term warming to 1.5°C.”

7. Ibid

8. On unconventional oil and gas, the OGPT assesses policies relative to the top four of the six sectors listed in the Global Oil and Gas Exit List: the Arctic, ultra deep offshore, tar sands and fracking.

9. According to the 2020 IEA investment report, around 90% of energy investments are financed on a primary basis from the balance sheet of companies, confirming that very few investments are raised through project financing.

10. For instance, 4 out of the 12 policies adopted since January 2022 include exceptions for credible transition plans.

11. Existing policies rarely define specifically their expectations for credible transition plans. In the case of the four policies with credible transition plan language adopted in 2022, none of them include redlines on expansion or carbon budget overshoot. This is a problem given there are currently competing methodologies on climate and 1.5°C alignment. The Transition Pathway Initiative for example concludes that an oil and gas company is “aligned” as long as its yearly carbon intensity levels drop to a certain level before 2050, but does not calculate whether the company’s total GHG emissions fit within the 1.5°C carbon budget. Reclaim Finance calculations find that net zero by 2050 targets of the oil and gas industry are not enough to avoid an early carbon budget overshoot.

12. The AMAP (Arctic Monitoring Assessment Programme) is a working group of the Arctic Council in charge of monitoring pollution and climate change in the Arctic region. It is the benchmark definition used in the Oil and Gas Policy Tracker and the Global Oil and Gas Exit List, also recommended by the French Observatory for Sustainable Finance.

13. The Coal Policy Tool was established in 2020, and now tracks and scores the coal policies more than 500 financial institutions.

Press contact : Anaïs Lehnert, comms manager at Reclaim FinanceEmail: anais@reclaimfinance.orgCell: +33670085898

Annex 1. Key stats on financial institutions

	All FIs	Banks	AM	AO	Insurers
Number of Glasgow FInancial Alliance for Net Zero (GFANZ) members	74	43	17	2	12
Number of exclusion policies	66	40	7	3	16
Number of exclusion policies targeting conventional oil and/or gas	14	9	0	1	4
Number of exclusion policies targeting unconventional oil and/or gas	66	40	7	3	16
Number of policies excluding some oil and gas projects	53	38	1	1	13
Number of policies excluding companies with oil and gas expansion plans (partially or totally)	5	5	0	0	0
Number of policies implementing a phase-out strategy from the oil and gas industry (partially or totally)	5	3	0	1	1
Number of policies (partially or totally) excluding Arctic oil and/or gas	54	39	3	1	11
Number of policies (partially or totally) excluding shale oil and/or gas	29	21	3	2	3
Number of policies (partially or totally) excluding tar sands	51	26	7	3	15
Number of policies (partially or totally) excluding ultra-deep water oil and/or gas	12	9	0	1	2

The key findings do not take into account new policies recently released by ABP, Aviva and Swiss Re, currently under evaluation.

Annex 2. List of financial institutions assessed in the Oil and Gas Policy Tracker

Financial institution	Country	Type
Credit Mutuel Group / Banque Federative du Credit Mutuel	France	Bank
Commerzbank	Germany	Bank
La Banque postale	France	Bank
ICBC	China	Bank
China Construction Bank	China	Bank
Agricultural Bank of China	China	Bank
Bank of China	China	Bank
MUFG	Japan	Bank
JPMorgan Chase	United States	Bank
BNP Paribas	France	Bank
HSBC	United Kingdom	Bank
Bank of America	United States	Bank
Crédit Agricole	France	Bank
Citi	United States	Bank
SMBC Group	Japan	Bank
Mizuho	Japan	Bank
Wells Fargo	United States	Bank
Santander	Spain	Bank
Barclays	United Kingdom	Bank
Société Générale	France	Bank
BPCE/Natixis	France	Bank
Postal Savings Bank of China	China	Bank
Bank of Communications	China	Bank
Deutsche Bank	Germany	Bank
TD	Canada	Bank
Royal Bank of Canada	Canada	Bank
China Merchants Bank	China	Bank
Intesa Sanpaolo	Italy	Bank
Shanghai Pudong Development Bank	China	Bank
Industrial Bank	China	Bank
Lloyds Banking Group	United Kingdom	Bank
Goldman Sachs	United States	Bank
China CITIC Bank	China	Bank
ING	Netherlands	Bank
UniCredit	Italy	Bank
UBS	Switzerland	Bank
Morgan Stanley	United States	Bank
NatWest (RBS)	United Kingdom	Bank
China Minsheng Bank	China	Bank
Credit Suisse	Switzerland	Bank
Scotiabank	Canada	Bank
China Everbright Bank	China	Bank
Commonwealth Bank of Australia	Australia	Bank
CaixaBank SA	Spain	Bank
BBVA	Spain	Bank
Standard Chartered	United Kingdom	Bank
Rabobank	Netherlands	Bank
Bank of Montreal	Canada	Bank
ANZ Banking Group	Australia	Bank
DZ Bank AG	Germany	Bank
Ping An Bank Co. Ltd.	China	Bank
Nordea Bank	Finland	Bank
Danske Bank	Denmark	Bank
Westpac Banking Corporation	Australia	Bank
State Bank of India	India	Bank
National Australia Bank	Australia	Bank
CIBC	Canada	Bank
Sumitomo Mitsui Trust Holdings	Japan	Bank
PNC	United States	Bank
KB Financial Group Inc	South Korea	Bank
AIG	United States	(Re)Insurer
Allianz	Germany	(Re)Insurer
Aviva	United Kingdom	(Re)Insurer
AXA	France	(Re)Insurer
AXIS Capital	Bermuda	(Re)Insurer
Berkshire Hathaway	United States	(Re)Insurer
Chubb	United States	(Re)Insurer
Convex	Bermuda	(Re)Insurer
Everest Re	Bermuda	(Re)Insurer
Generali	Italy	(Re)Insurer
Liberty Mutual	United States	(Re)Insurer
Lloyd’s	United Kingdom	(Re)Insurer
Mapfre	Spain	(Re)Insurer
MS&AD	Japan	(Re)Insurer
Munich Re	Germany	(Re)Insurer
Ping An	China	(Re)Insurer
QBE	Australia	(Re)Insurer
Samsung FM	South Korea	(Re)Insurer
SCOR Re	France	(Re)Insurer
Sinosure	China	(Re)Insurer
Sompo	Japan	(Re)Insurer
Swiss Re	Switzerland	(Re)Insurer
Hannover Re	Germany	(Re)Insurer
Talanx - HDI Global	Germany	(Re)Insurer
The Hartford	United States	(Re)Insurer
Tokio Marine	Japan	(Re)Insurer
Travelers	United States	(Re)Insurer
W.R. Berkley	United States	(Re)Insurer
Zurich	Switzerland	(Re)Insurer
Abu Dhabi Investment Authority	United Arab Emirates	Asset owner
AON	United States	Asset owner
APG	Netherlands	Asset owner
CalPERS	United States	Asset owner
Canada Pension Plan (CPP)	Canada	Asset owner
CDPQ	Canada	Asset owner
Central Provident Fund	Singapore	Asset owner
China Investment Corporation	China	Asset owner
Employees Provident	India	Asset owner
Employees Provident Fund	Malaysia	Asset owner
Federal Retirement Thrift	United States	Asset owner
GIC Private Limited	Singapore	Asset owner
Goldman Sachs AO	United States	Asset owner
Government Pension Investment Fund (GPIF)	Japan	Asset owner
Hong Kong Monetary Authority Investment Portfolio	Hong Kong	Asset owner
Investment Corporation of Dubai	United Arab Emirates	Asset owner
Kuwait Investment Authority	Kuwait	Asset owner
Local Government Officials	Japan	Asset owner
Mercer	United States	Asset owner
Mubadala Investment Company	United Arab Emirates	Asset owner
National Pension	South Korea	Asset owner
National Social Security China	China	Asset owner
New York City Retirement	United States	Asset owner
New York State Common Retirement Fund (NYSCRF)	United States	Asset owner
Norges Bank Investment Management	Norway	Asset owner
PGGM	Netherlands	Asset owner
Public Investment Fund/Sanabil Investments	Saudi Arabia	Asset owner
Qatar Investment Authority	Qatar	Asset owner
SAFE Investment Company	China	Asset owner
Temasek	Singapore	Asset owner
Aegon Global	Netherlands	Asset manager
Allianz - PIMCO	United States	Asset manager
Allianz Global Investors	Germany	Asset manager
AXA IM	France	Asset manager
BlackRock	United States	Asset manager
BNP Paribas AM	France	Asset manager
BNY Mellon IM	United States	Asset manager
Capital Group	United States	Asset manager
Crédit Agricole - Amundi	France	Asset manager
Deutsche Bank - DWS	Germany	Asset manager
Fidelity	United States	Asset manager
Franklin Templeton	United States	Asset manager
Goldman Sachs AM	United States	Asset manager
HSBC Global AM	United Kingdom	Asset manager
Invesco	United States	Asset manager
J.P. Morgan AM	United States	Asset manager
Legal & General IM (LGIM)	United Kingdom	Asset manager
Morgan Stanley IM	United States	Asset manager
Natixis Investment Managers	France	Asset manager
Northern Trust	United States	Asset manager
Power Financial	Canada	Asset manager
Prudential Financial	United States	Asset manager
State Street	United States	Asset manager
Sumitomo Mitsui Trust AM	Japan	Asset manager
Sun Life Financial	Canada	Asset manager
T. Rowe Price	United States	Asset manager
TIAA - Nuveen	United States	Asset manager
UBS AM	Switzerland	Asset manager
Vanguard	United States	Asset manager
Wellington Management	United States	Asset manager
Wells Fargo AM -> Allspring Global Investments	United States	Asset manager

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