Environmental lawyers are urging EU leaders to resist years of intensive lobbying efforts by BP and other large oil and gas companies that want fossil fuel gas labelled as ‘environmentally sustainable’ for investment purposes.
With just weeks before the EU is due to unveil the rules for its flagship initiative classifying green investments, legal experts from ClientEarth are urging European leaders to disregard gas industry demands and set the taxonomy for sustainable finance in line with science.
The European Commission is expected within weeks to finalise the critical taxonomy rules for climate change mitigation and adaptation. The rules will classify what business activities are deemed sustainable and will help re-orient finance flows toward genuinely green businesses and to avoid greenwashing.
In October, the International Association of Oil and Gas Producers (IOGP) wrote to EU leaders demanding they disregard the bloc’s own expert advice and classify fossil fuel gas power and heat as sustainable, alongside other business activities like actual renewable energy. The letter – signed by BP, Total, Repsol, Equinor and UNIPER among others – followed more an €70 million worth of gas industry lobbying, including more than 300 meetings with policymakers since 2018, on the European sustainable finance plans.
Lawyers questioned BP’s role in the letter, given CEO Bernard Looney’s pledge just in September that the company was changing its approach to lobbying and would only push for policies in line with its net zero ambitions.
ClientEarth climate lawyer Johnny White said: “The gas lobby appears to be doubling down on greenwashing in Brussels: lobbying to water down green investment standards, when it can use the same standards to camouflage continued access to capital for unsustainable fossil gas.
“The gas industry will avoid market scrutiny if it can label unabated fossil gas as ‘sustainable’ through the EU taxonomy. Gas is not green or ‘clean’, it’s a fossil fuel. The science is clear, we simply cannot afford investment that locks in gas infrastructure with no place in a net zero future.
“BP’s role in this lobbying calls into question its net zero promises just months after its CEO earned global plaudits for the company’s shiny new green image. Nor is it just BP – other companies behind the IOGP letter are publicising net zero commitments. A genuine net zero strategy should focus on real decarbonisation rather than moving the goal posts on what is deemed sustainable.”
ClientEarth lawyers said that for the EU’s taxonomy to succeed, it must be an accurate, science-based standard for the investment needed to reach a net zero future.
White added: “If gas investments are labelled green, the taxonomy risks funnelling money into disastrous projects that ‘lock in’ generating carbon into the future – right when we need to decarbonise urgently – instead of shifting investment flows toward genuinely sustainable sectors.”
Investors and banks will also look to the EU taxonomy as a single credible, science-based market standard to accurately manage ESG risks and opportunities. If gas investments are included, there is a risk the flagship EU standard will become meaningless as a reference point for investors.
“In the coming AGM season, we recommend that investors actively engage with companies on the lobbying that their money is funding, and how this lobbying aligns with companies’ net zero commitments”, White said.
* ClientEarth https://www.clientearth.org/
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