In an ever-increasing raft of Environment, Social and Governance (ESG) litigation, news has broken that that BNP Paribas, the largest bank in the euro zone, is facing legal action for fossil fuel financing.

While ESG litigation is increasing against governments and corporations (and even most recently against individual Shell directors), this claim is the first of its kind against a commercial bank.

Oxfam, Friends of the Earth and Notre Affaire à Tous have issued the summons at the Paris Judicial Court, claiming that BNP are breaching 2017 French environmental vigilance laws. The advocacy groups allege that BNP “continues to write new blank cheques to the largest fossil fuel companies without setting any conditions for an oil-free, gas-free ecological transition“, and are seeking an end to the financing of fossil fuels. The relevant laws have yet to be enforced in this way in French courts.

BNP has defended its position, stating that it could not stop all fossil-fuel financial right away but that it was focused on its fossil-fuel exit path, accelerating financing for renewable energies and supporting their customers. They “regret” that the advocacy groups have chosen litigation over dialogue.

Legal activism is increasingly being deployed by campaigners seeking to force companies to take action on their ESG impact.

The advocacy groups are laying claim to a “fundamental role the financial industry has been playing in the climate crisis“, as this case builds on a number of other recent legal claims targeting different laws and organisations ranging from Air France-KLM’s Dutch branch to Shell, TotalEnergies and the French state.

The Paris Judicial Court will propose a schedule for the next steps in the proceedings.

Conclusion

Although this action has its basis in French law, many companies globally, including in Ireland, find themselves facing ever-increasing ESG-related obligations. This ESG litigation may be the first of its kind, but as said by Notre Affaire à Tous campaigner, “is undoubtedly the first of many around the world.”

For more information, or to discuss any aspect of this article in more detail please contact Hilary Rogers or your usual William Fry contact.