BNP Paribas will phase-out coal-fired power sector from its investments, with Reclaim Finance, BankTrack and Friends of the Earth France praising the new policy whilst also pointing to a missed opportunity to commit to a full coal phase-out and to adopt measures to push all companies in its portfolios to close their coal infrastructure.

With its announcement BNP Paribas is extending its existing policy by including coal power sector phase-out commitments to OECD countries outside the EU, but the updated BNP Paribas policy falls short by limiting its exclusion commitments to coal plant developers, overlooking other companies with otherwise high coal exposure.

Criticism of the limited extension compare the policy to that of rivals Crédit Agricole, Crédit Mutuel, AXA and others, and note that the exclusion of companies with 25 per cent or greater share of coal-related revenues only concerns new clients and it is unclear which existing clients, such as German utility RWE, which is among the bank's most coal-dependent customers, will be excluded.

This determination will depend on what the bank “believes” about any given client company’s likelihood to be aligned with the Paris Agreement objectives in the coming years.

Lucie Pinson, founder and director of Reclaim Finance, comments: “There is no time to play guessing games and BNP Paribas must build on the good practices from AXA and Crédit Agricole when writing the details of its commitments in a future updated sector policy. On top of immediately excluding existing clients that are highly exposed to coal, BNP Paribas must clearly and immediately require companies to publish by 2021 an asset-based coal exit plan.”

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