A study by Pickering Energy Partners shows banks across the U.S. are backing away even more from their climate goals and previous discrimination of the oil and gas industry. Regional banks are actually increasing their efforts to finance the energy industry, rather than using ESG or Environmental Social Governance policies to avoid making loans to oil and gas operators.
Pickering reported that banks, insurers and asset managers are also dumping their membership in industry climate associations, inccluding the Net Zeero Banking Alliance and Net Zero Insurance Alliance.
“As we’re quickly approaching 2030, a benchmark year for privately set climate goals, many of which are likely to be missed, banks are plausibly (and correctly) adding up that net zero targets by 2050 will not be achievable,” stated the report.
The energy group went on to concludethat in the foreseeable future, geopolitics looks to ensure that energy security remains a high priority. Thus, it means to maintain such security will also require “long-term investment (and potential profit) from banks and asset managers.”
” Despite headlines of activist protests pushing the contrary, the overall pragmatic stance on energy financing in the U.S. as opposed to the EU ultimately means more opportunity for U.S. lenders and energy companies.”
Pickering’s study, highlighted by the Energy Workforce & Technology Council, also found that regional banks in the U.S. are “ratcheting up lending to oil and gas clients” and at the same time, grabbing market share as bigger European rivals back away from such lending practices. It noted that one U.S. regional bank was recently among three lenders that replaced Barclays on a $325 million loan to a small-cap U.S fracking company.
Barclays was recently added to Oklahoma’s list of financial firms boycotted by the state because of the lending company’s discrimination of the oil and gas industry. The placing, announced by Oklahoma Treasurer Todd Russ, occurred prior to a judge’s recent ruling to suspend enforcement of the Oklahoma Energy Discrimination Elimination Act.