HSBC, Lloyds, NatWest and BNP Paribas are financing major North Sea oil expander Ithaca Energy, despite pledges to stop propping up new fossil fuel projects.
Twelve major banks have been providing finance to Ithaca, the minority owner of the controversial Rosebank oil field, despite various pledges to align with the Paris Agreement and cease support for fossil fuel expansion.
Ithaca Energy is a ‘pure play’ fossil fuel company that focuses exclusively on oil and gas. It has a major hand in two of the three largest and most significant expansion projects in the North Sea. Because it does not develop renewable energy, Ithaca Energy has no viable means to facilitate a transition away from fossil fuels.
Almost all of the banks in question - Bank of America, BNP Paribas, Deutsche Bank, Goldman Sachs, HSBC, ING, JP Morgan, Lloyds, Morgan Stanley, NatWest and Wells Fargo - are members of the Net Zero Banking Alliance. Their membership means they must bring their financed and facilitated emissions in line with the 1.5 degree goal of the Paris Climate Agreement and commit to the transition towards green energy. DNB, a Norwegian financier of Ithaca, has also publicly committed to reducing its portfolio’s emissions intensity by 25% by 2030.
Financing Ithaca Energy, whose revenues rely solely on oil and gas and who remains intent on developing new oil fields, casts doubt over the commitments made by these banks as the company cannot diversify into green energy or transition its business.
If Ithaca Energy remains intent on developing the Rosebank oil field - which would emit 200 million tonnes of CO2 if given the green light - the banks providing its finance are breaching the spirit of the Net Zero Banking Alliance, as well as other public commitments they have made on climate.
Some banks, such as HSBC, Lloyds, NatWest and BNP Paribas have publicly pledged to stop directly financing new oil and gas projects, raising questions over why they would provide ‘general corporate finance’ to one of the North Sea’s most prolific oil and gas expanders.
Today, over 80 organisations have written to the CEOs of the twelve banks found to be financing Ithaca Energy, calling on them to end future finance towards the company should it proceed with its polluting Rosebank project.
The organisations include the likes of Make My Money Matter, Greenpeace UK, Global Witness, Rainforest Action Network, Future in our Hands, Reclaim Finance and more.
The letters come as the UK government faces mounting pressure for approving Rosebank in September 2023, facing legal challenges in the Scottish courts over its decision. By financing Ithaca Energy and failing to keep their climate promises, banks too are exposing themselves to reputational risk, investor pressure and potential litigation.
Lauren MacDonald, Stop Rosebank campaigner commented:
“Rosebank is the poster child for North Sea oil and gas expansion, so why are these banks - some of whom say they no longer support new fossil fuel projects - providing billions to its minority owner, who has no plans to dial down oil and gas drilling?
“If the project goes ahead, it will emit more CO2 emissions than the 28 lowest income countries produce in a year combined, while Ithaca rakes in hundreds of millions. If these banks are serious about their climate pledges and tackling the climate crisis, they must stop this blatant greenwashing and cease financing Ithaca until it pulls the plug on Rosebank.”
Henrieke Butijn, Climate campaigner and researcher at BankTrack said:
"Ithaca is a company that is purely focused on North Sea oil and gas and its expansion, with no interest in renewables. Banks that finance companies like this are making a mockery of their climate commitments. But worse than that, their finance is shattering our chances of staying below 1.5 degrees Celsius, and aggravating the impacts of climate chaos that especially communities of colour and those in the Global South already have to deal with every single day."
Tony Burdon, CEO at Make My Money Matter commented:
“It’s shameful that Lloyds and NatWest - two of the UK’s biggest banks - claim climate leadership while pumping millions into a company at the heart of deadly fossil fuel expansion in the North Sea.
This year alone, we’ve seen major NGOs and Universities cut ties with banks that fund new oil and gas, and Lloyds and NatWest face that same fate if they don’t close the loopholes that allow them to provide back door funding to projects like Rosebank.
NatWest and Lloyds have the chance to become leaders on the UK high street. But actions like this undo their good work, leaving them united with HSBC and Barclays as UK banks shamelessly profiting from climate catastrophe. That’s why they must end finance to Ithaca and turn off the taps to all other fossil fuel giants expanding oil and gas.”
ENDS
Notes to Editors
Methodology
Findings taken from the Banking on Climate Chaos 2023 report and the Bloomberg terminal.
According to the BOCC 2023 data, relating to finance between 2016 and 2022:
The guidelines for the Net Zero Banking Alliance aim to keep organisation in line for 1.5 degrees. Read more here.
For queries around the methodology, please contact BankTrack.
BankTrack’s Asks
About Rosebank
The Rosebank oil and gas field is located in the North Sea, 130 kilometres off the coast of the Shetland Islands. It is the UK’s largest undeveloped oil field, containing an estimated 500 million barrels of oil equivalent (boe). Burning Rosebank’s oil and gas would produce over 200 million tonnes of CO2. These emissions are equal to more than the annual CO2 emissions of all 28 countries categorised as low-income by the World Bank combined. The field would be developed by Equinor, which holds an 80% stake, and Ithaca Energy, which holds a 20% stake.
About Ithaca Energy
Ithaca Energy is a ‘pure play’ fossil fuel company with stakes in six of the ten largest producing fields in the UK North Sea and in two of the three largest prospective developments, the Cambo and Rosebank fields. While Ithaca Energy has a net zero emissions target for 2040, this target only covers its production emissions and not the emissions resulting from burning the oil and gas it extracts. According to the Global Oil and Gas Exit List (GOGEL), 89.9% of its short-term expansion plans overshoot the 1.5 °C scenario.
At the same time, the company does not invest at all in renewables. This while the IEA’s last World Energy Outlook, published in September, emphasises that “simply cutting spending on oil and gas will not get the world on track for the NZE Scenario; the key to an orderly transition is to scale up investment in all aspects of a clean energy system”. Besides, an analysis from BloombergNEF found that, in a 1.5 degree scenario, “from 2021 to 2030, for each dollar invested in fossil fuel energy supply, four would be invested in low-carbon energy supply”. By continuing to invest in fossil fuels and not investing in renewable energy, it is clear that Ithaca Energy has no intention to contribute to the UK’s transition away from oil and gas and to achieve net zero by 2050.
