Green Climate Fund under pressure to shun HSBC and Credit Agricole

Campaigners have urged the UN’s Green Climate Fund to reject the involvement of HSBC and Credit Agricole, ahead of COP21.

A group of 88 NGOs, charities and academic bodies has penned an open letter to the board of the GCF, claiming that the accreditation of the two banks, which is currently being considered, would “pose serious reputational and moral risk to the GCF”.

Accreditation allows an institution to receive and distribute money on behalf of the GCF. In July, Deutsche Bank came under similar fire from NGOs after it was accredited by the fund.

“The banks’ accreditation would undermine the GCF’s commitment to robust fiduciary standards and strong environmental and social safeguards… and would be contrary to what the GCF Secretariat has described as having ‘GCF standards [that] build on best practices of global institutions’”, said the letter, which was signed by Friends of the Earth, ActionAid US and BankTrack Netherlands, among others.

According to the group, the two banks rank among the top 20 private banks to finance coal. Credit Agricole invested more than €7 billion in the coal sector between 2005 and 2014, while for HSBC this figure was more than €7.9 billion.

“Both banks also back non-fossil-fuel-based sectors with a large negative impact on climate. HSBC is a major financier of Indonesia’s palm oil sector, a sector characterised by driving deforestation on a vast scale, industrial agricultural excess, degradation of carbon-rich peatlands, human rights abuse, and labor exploitation,” it said.

“Accredited entities should have exemplary policies and practices in place to adequately deal with potential social, gender equality, environmental, and human rights risks of the projects they finance. This is not the case with HSBC and Crédit Agricole,” it continued, adding that HSBC has been accused of “bankrolling” logging companies in Malaysia.

The letter did not propose an alternative bank that would be deemed more suitable to receive and distribute the funds of the GCF. A spokesperson for Friends of the Earth, which led the campaign, told Environmental Finance that no “international banks should have direct access to GCF funds”.

HSBC and Credit Agricole did not respond to requests for comment ahead of publication.

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