European Banks Cut Oil and Gas Lending but Financing Gaps Remain

Written by Maílis Carrilho

•

Published Oct 5, 2026

6 min read

Updated Oct 6, 2026

Four major European banks have made progress in reducing their lending exposure to oil and gas production, but gaps remain in how their climate commitments address other financing channels, according to an analysis published by Reclaim Finance on September 29, 2026.

The assessment highlights BNP Paribas, Crédit Agricole, Société Générale, and ING for adopting targets to reduce the financial volume of their support for upstream oil or gas activities. Upstream activities include exploration and production.

The campaign group considers these commitments a useful addition to emissions targets because they directly address banks’ financial exposure to the sector. However, it argues that lending reductions should be accompanied by targets covering bond and equity underwriting, alongside restrictions on financing companies developing new fossil fuel projects.

Reported Reductions Exceed Several Commitments

BNP Paribas reported that its upstream oil credit exposure declined from €5 billion in 2022 to €1 billion in 2025, an 80% reduction. This matched the percentage reduction specified in its 2030 target. Over the same period, upstream gas exposure fell by 66%, from €5.3 billion to €1.8 billion, exceeding its 30% reduction target for 2030.

These figures measure changes in the bank’s financial exposure. They do not represent equivalent percentage reductions in oil and gas production or greenhouse gas emissions. Reclaim Finance nevertheless considers exposure targets useful because they establish a measurable trajectory for reducing financial support to producers.

Société Générale reported a 76% reduction in upstream oil and gas exposure against its 2019 baseline by the third quarter of 2025. That exceeded its 50% reduction objective for 2025 and brought it close to its 80% target for 2030. Its separate financed emissions target covers upstream, midstream, and downstream activities, while its exposure reduction target covers upstream activities only.

ING reported a 71% reduction in upstream oil and gas credit exposure by the end of 2025 against a 2019 baseline, exceeding its 35% reduction target for 2030. It also has a commitment to eliminate upstream lending exposure by 2040. The briefing notes that its exposure reporting now uses full committed loan amounts, with the baseline adjusted accordingly.

Crédit Agricole reported a 72% reduction in upstream oil credit exposure by December 2025, compared with a target of 25% against its 2020 baseline. However, Reclaim Finance identified no replacement financial exposure target beyond 2025 and called for new 2030 commitments covering both oil and gas. Its existing financed emissions target is a separate commitment.

Why Emissions Accounting Needs Careful Interpretation

The analysis also questions the use of financed emissions reductions as the principal measure of banking climate progress.

Financed emissions allocate a share of a borrower’s emissions to its financial providers. For listed companies, commonly used calculations incorporate enterprise value including cash, which reflects market capitalization and debt.

As Reclaim Finance explains in its Société Générale briefing, rising company valuations can reduce the emissions attributed to a bank even when the company’s physical emissions do not decline. Consequently, a falling financed emissions figure may reflect changes in financial valuation as well as changes in lending or corporate emissions.

For stakeholders assessing bank disclosures, the implication is that headline reductions need supporting explanations. Exposure data can show whether financial support has contracted, while emissions information addresses a different question. Neither figure alone establishes the effect of a bank’s decisions on emissions across the wider economy.

Capital Markets Remain a Financing Gap

A central concern is that the four banks’ financial volume targets do not cover their capital markets activities. Banks can help companies raise money by arranging bond or equity issuances, even when that financing does not remain in their lending portfolios.

Reclaim Finance says BNP Paribas and Crédit Agricole announced restrictions in May 2024 on underwriting conventional bonds for companies involved in oil and gas extraction. However, these measures do not comprehensively address equity issuances or midstream and downstream activities.

This creates an important distinction between reducing credit exposure and reducing overall financial support. A complete assessment must examine both lending commitments and the financing banks facilitate through capital markets.

The Wider Energy Value Chain Matters

The scope of the targets also affects their usefulness. Upstream lending commitments do not automatically cover pipelines, liquefied natural gas terminals, transport infrastructure, or refining.

ING describes an approach that combines upstream exposure reductions with emissions intensity targets for midstream and downstream activities. Its published policy also restricts new general financing to pure-play upstream companies opening new fields, including corporate financing and bonds.

These differences illustrate why targets and exclusion policies need to be assessed together. A portfolio reduction target establishes a longer-term direction, while a financing restriction determines which clients or transactions remain eligible.

Implications for the Energy Transition

Reducing fossil fuel exposure is only one part of banks’ energy transition strategies. Financing low-carbon supply also matters.

BNP Paribas reports that low-carbon energy production represented 82% of its credit exposure to energy production at the end of September 2025. This included €38.3 billion in low-carbon exposure, of which €35.6 billion related to renewables. Its 2030 objective is at least €40 billion in low-carbon energy production exposure. These figures concern a defined financing portfolio rather than the bank’s entire business.

For investors, borrowers, and sustainability teams, the findings support closer scrutiny of target boundaries, baselines, and calculation methods. The four banks demonstrate that substantial exposure reductions are possible. Establishing their wider climate contribution requires evidence about financing channels, client behavior, and physical emissions alongside the reported financial results.

Source:

Written by:

Maílis Carrilho

Sustainability Research Analyst

Maílis Carrilho is a Sustainability Research Analyst (Intern) at Net Zero Compare, contributing research and analysis on climate tech, carbon policies, and sustainable solutions. She supports the team in developing fact-based content and insights to help companies and readers navigate the evolving sustainability landscape.

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