French bank Société Générale has announced that it will halve its upstream oil and gas exposures by 2025 compared with 2019 levels.
The European financial leader also said that it will cut its upstream oil and gas exposure by 80% from 2019 levels by 2030.
Alongside the targets, the bank announced a €1bn ($1.07bn) transition investment fund in a press statement published on Monday. The fund will “focus on energy transition solutions and nature-based and impact-based projects supporting [the] UN’s Sustainable Development Goals”, Société Générale said.
In addition, it will also cease its offer of financial products and services dedicated to new oil and gas fields at the beginning of 2024.
The reduction in oil and gas financing is up from the 20% reduction previously pledged by the bank.
“We will accelerate the decarbonisation of our businesses and work closely with our clients and partners to maximise our positive impact at the forefront of the energy, environmental and social transition,” said Slawomir Krupa, CEO of Société Générale group.
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Société Générale’s announcement comes amid criticism from NGOs that banks should not finance fossil fuels. Sustainable finance is becoming a growing priority for various organisations. In July, major charity Christian Aid announced that it would no longer bank with Barclays due it its continued financing of oil and gas.
Société Générale also outlined its new financial objectives in Monday’s statement. The bank said it would focus on profitability, operational efficiency and risk management while “fostering sustainable business”.
Investors were unimpressed by the announcement, which was the first time that CEO Krupa outlined his vision for the bank having taken the role in May. The bank’s shares were down around 12% following the announcement on Monday.