Sylvie Willis
Santander has been criticized for its involvement in fossil fuel financing, with investments totalling $79.88 billion since the Paris Agreement in 2016. Despite its commitment to net-zero emissions by 2050, Santander's investments in the fossil fuel industry increased by 77% in 2023, reaching $14.54 billion. The bank has been accused of greenwashing, with its fossil fuel financing contradicting its sustainability claims. Santander has been involved in funding projects related to unconventional oil and gas, LNG terminals, and coal mining, falling short of comprehensive exclusion policies and rapid phase-out strategies. While the bank has made some positive steps towards reducing its exposure to coal, it has been criticized for moving too slowly and not committing to a complete phase-out of fossil fuel financing.
| Characteristics | Values |
|---|---|
| Fossil fuel financing | $79.88 billion since the Paris Agreement |
| Fossil fuel financing in 2023 | $14.54 billion |
| Fossil fuel financing increase from 2022 to 2023 | 77% |
| Fossil fuel financing in 2020 | Increased from 2019 |
| LNG financing | $6.82 billion |
| Amazon oil production involvement | $35 million |
| Position on fossil fuel exclusion policies | No commitment to any rapid exclusion policy |
| Coal mining phase-out | By 2030 |
| Power generation clients with more than 10% of revenues from thermal coal to be excluded | By 2030 |
| Oil and gas projects to be excluded | Any project involved in exploration, development, transportation, construction, or expansion of unconventional oil and gas |
| Plaquemines LNG project financing | $7.8 billion |
| Port Arthur LNG financing | $7 billion |
| Rio Grande terminal financing | $12 billion |
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What You'll Learn
Santander's fossil fuel investments since the Paris Agreement
Santander has invested heavily in fossil fuels since the Paris Agreement was signed in 2016. In total, Santander has allocated $79.88 billion to the fossil fuel business since 2016. This includes $6.82 billion devoted to LNG, making it the third-largest financier of liquefied fossil gas, and $35 million in oil production in the Amazon. Santander has also invested almost $2 billion in coal since 2016, with $232 million of that coming from 2023 alone.
The bank has also been criticised for its involvement in financing fossil fuel projects in environmentally sensitive areas. For example, Santander helped coordinate a billion-dollar bond to expand the operations of PetroPerú, a national oil company with a major pipeline slicing through vital wetlands supposedly protected by the bank's climate policy. The bank has also been involved in financing LNG terminals in Texas, including the Rio Grande terminal served by pipelines that pass close to the ancestral land of the Carrizo/Comecrudo Tribe.
Santander has made some efforts to reduce its exposure to fossil fuels. It plans to reach 0% exposure to thermal coal mining by 2030 and will exclude power generation clients with more than 10% of revenues dependent on thermal coal from 2030. However, critics argue that this is not enough, as a 10% threshold is too high to be considered a phase-out, and Santander has not committed to a real coal power phase-out. Additionally, Santander's new fossil fuel policy does not exclude oil and gas developers, and there is no phase-out timeline mentioned for these sectors.
Overall, Santander's actions since the Paris Agreement indicate that it continues to prioritise investments in fossil fuels over addressing the climate crisis. Despite its claims of supporting a "fair and secure green transition" and achieving "net-zero carbon emissions by 2050", the bank's practices contradict its sustainability commitments.
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Santander's financing of fossil fuel companies
Santander has been criticized for its financing of fossil fuel companies, which seemingly contradicts its sustainability claims. Despite committing to net-zero emissions by 2050, Santander increased its investment in fossil fuels by 77% in 2023, reaching $14.54 billion. Since the Paris Agreement was signed in 2016, the bank has allocated a total of $79.88 billion to the fossil fuel industry.
Santander has been a major participant in financing liquefied natural gas (LNG) projects, with $6.82 billion invested in this sector. LNG terminals on the Gulf Coast, such as the Plaquemines LNG project in Louisiana, have been criticized as contributing to a 'carbon bomb' and putting profits over people. Santander was part of a banking collective that lent $7 billion to Port Arthur LNG and $12 billion to the Rio Grande terminal near Texas' border with Mexico.
The bank has also been involved in financing oil and gas exploration and production, including unconventional oil and gas projects such as fracking. While Santander has extended its exclusion policy to cover some types of unconventional oil and gas projects, it still falls short of excluding all fossil fuel-related development. For example, it does not exclude conventional oil and gas projects or companies with "significant reserves."
Santander has also faced criticism for its involvement in coal mining. While the bank has committed to phasing out coal mining by 2030, this phase-out strategy has been criticized as too slow and not comprehensive enough. Between October 2018 and October 2020, Santander channelled $5.7 billion to 25 coal companies.
Overall, Santander's financing of fossil fuel companies has raised concerns about its commitment to sustainability and addressing the climate crisis.
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Santander's exclusion policy for coal and fossil fuel customers
Santander has been criticised for its involvement in fossil fuel financing. Between October 2018 and October 2020, Santander channelled $5.7 billion to 25 coal companies. The bank has also been involved in financing gas projects, such as the $7.8 billion Plaquemines LNG project in Louisiana.
Santander has taken some steps towards reducing its involvement in fossil fuel financing. The bank has improved its policy on project financing, preventing the direct financing of any new coal mines and power plants, including the extension of operating plants and mines. It also plans to exclude power generation clients with more than 10% of revenues dependent on thermal coal from 2030 and reach 0% exposure to thermal coal mining by 2030. However, Santander's new fossil fuel policy does not include a rapid exclusion policy for its customers involved in coal and fossil fuel development. The bank has also been criticised for not excluding oil and gas developers from its policy and for not setting a phase-out timeline for these sectors.
Santander's new policy excludes financing for new upstream oil projects and clients, with an exception for renewable energy projects carried out by oil companies. It also excludes new projects or the expansion of existing projects north of the Arctic Circle, tar sands, fracking, and coal bed methane. These activities are excluded when they form a "significant part of their reserves" or more than 30% of a company's activities.
While these improvements show that Santander has embraced the conclusion that reaching net-zero greenhouse gas emissions by 2050 means "there is no need for investment in new fossil fuel supply," the bank still falls short in some areas. Santander's policy does not cover ultradeepwater and LNG projects and does not include a phase-out timeline for oil and gas sectors. As a result, Santander has been criticised for moving too slowly on fossil fuels and for lacking ambition in its environmental, social, and governance (ESG) policy.
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Santander's involvement in LNG terminals
Santander has been criticized for investing hundreds of millions of dollars in liquified natural gas (LNG) terminals in the Gulf Coast. The bank was part of a collective that lent $7 billion to Port Arthur LNG, an LNG terminal in southeast Texas. Santander was also involved in a $12 billion package for the Rio Grande terminal near Texas’ border with Mexico. These LNG projects rely on fracked gas, contributing to significant CO2 emissions and local environmental issues.
Santanders' involvement in the LNG terminals contradicts its climate policy opposing fossil fuel investments. The bank quietly revised its policy to allow exceptions related to fracking, stating that exceptions "may be considered" subject to factors including energy security and local development. This undermines its commitment to climate action and has led to concerns over the environmental and health impacts of LNG development.
Santanders' policy has been described as "highly problematic" by experts, who argue that it narrowly focuses on gas extraction while allowing the financing of new LNG terminals, which require increased extraction to be economically viable. The bank's practices have also been criticized as insufficient and contradictory to its sustainability commitments.
While Santander has made some positive steps towards reducing its involvement in fossil fuels, such as phasing out coal mining by 2030, its lack of commitment to a rapid exclusion policy and support for LNG terminals highlight a slow transition away from fossil fuels. The bank's total value of financing for companies across the fossil fuel life cycle increased in 2020, demonstrating its continued funding of the fossil fuel sector.
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Santander's investments in oil and gas extraction
Santander has been criticised for its involvement in fossil fuel financing, with investments in this sector increasing by 77% in 2023 to a total of $14.54 billion. This is in stark contrast to the bank's eco-friendly promises and sustainability claims. Between October 2018 and October 2020, Santander channelled $5.7 billion to 25 coal companies. The bank has also been involved in raising billions for gas projects, including at least $28 billion for LNG terminals on the Texas and Louisiana coastlines.
In terms of oil and gas extraction specifically, Santander has invested $35 million in the Amazon biome, with a total of $1.065 billion invested in this region since the Paris Agreement. The bank has also been involved in arranging billion-dollar oil bonds and has updated its policy on wetlands to cover "any projects or activities for oil and gas extraction".
Santander has also invested $166 million in oil and gas activities in ultra-deep waters. While the bank has extended its exclusion at the project level for unconventional oil and gas, it has been criticised for not covering ultra-deepwater and LNG projects. Santander's new policy also does not exclude oil and gas developers, and the bank has been accused of exploiting loopholes in its climate policy to facilitate investments in this sector.
Overall, Santander's investments in oil and gas extraction are part of its broader involvement in the fossil fuel industry, which has been the subject of significant criticism from environmental groups and regulators.
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Frequently asked questions
Yes, Santander has invested billions in fossil fuels since the Paris Agreement, contradicting its sustainability claims.
Santander has invested $79.88 billion in fossil fuels since 2016, with a 77% increase in investment in 2023 compared to 2022.
Santander has financed various fossil fuel projects, including LNG terminals, oil and gas exploration, and coal mining.
Santander has faced criticism for its slow transition away from funding fossil fuels. While it has committed to achieving net-zero emissions by 2050, the bank has been criticized for its lack of a rapid exclusion policy and for weakening its fossil fuel policy.
