Spanish banks must urgently stop financing oil and gas projects

  • BBVA and Banco Santander’s new commitments regarding thermal coal is a step in the right direction, but it is imperative they stop financing other fossil fuel projects that are incompatible with the Paris Agreement.

Madrid, November 11, 2021 – Decarbonizing the economy is an essential step towards limiting the increasing of our global temperature to around 1.5ºC and to meet the objectives of the Paris Agreement. To do so, banks must stop supporting carbon-intensive economic activities whose greenhouse gas (GHG) emissions are incompatible with the global fight against climate change.

In February 2021, the International Institute for Law and the Environment (IIDMA) presented a comprehensive report analyzing the sectoral policies of the six main Spanish banks (Bankia, Bankinter, BBVA, CaixaBank, Sabadell and Santander) and offered a series of recommendations for the sector (see here).

Since then, only BBVA and Santander have significantly modified their climate commitments mainly in the mining and energy sector. Both entities have adopted commitments to gradually reduce their coal financing until 2030. In addition, Banco Santander has expanded the list of activities linked to fossil fuels they will stop financing.

IIDMA, while recognizing that these commitments show more ambition, they wish to point out that it is essential and urgent to prohibit the financing of other fossil fuel projects. Quentin Aubineay, IIDMA’s lawyer points out, “Spanish banks must make commitments in the most carbon-intensive sectors to align their financial activities with their decarbonization objectives. For example, BBVA must detail the measures it will take to meet its 2030 sectoral decarbonization targets published last week.”

It should be noted that last May, the European Energy Agency warned about the incompatibility between the development of new oil and gas projects in the energy sector and the achievement of carbon neutrality by 2050.

For more information, please see our “Briefing 2021: Assessment of the new sectoral commitments of Spanish banks.”