Penalties do not apply below score 1. The total penalties in a sector cannot exceed the number of points earned by the financial institution regarding this specific sector.

Remarks

We define upstream oil & gas projects as: 

• Oil & gas exploration;
• Development of a new oil & gas field*;
• Expansion or redevelopment of any field. 

We define midstream oil & gas projects as: 

• Infrastructure directly related to new oil & gas fields*;
• Any new Liquefied Natural Gas (LNG) infrastructure;
• Capacity increase of existing infrastructure. 

We recommend that exclusion policies targeting companies expanding their oil & gas production be based on the Global Oil & Gas Exit List (GOGEL), and especially on the short-term expansion metric relying on resources under development and field evaluation (in mmboe) per company. This metric allows financial institutions to identify oil and/or gas resources that will come into production in the near future.

Bonus & penalties

• Bonus +1/2 if additional commitments to phase out from oil & gas-fired power generation activities by 2040 worldwide/and by 2030 in OECD countries.
• [Unconventional] Penalty -1 if phase-out commitment from unconventional sectors applies between 2031 and 2040.
• [Unconventional] Penalty -1 if phase-out commitment only covers a few unconventional sectors.
• [For scores between 1 and 8] Penalty -2 if commitment only applies to oil or gas.
• Penalty -1 when exceptions are minimal, -2 when exceptions are significant.
• Penalty -2 if financial services dedicated to oil & gas projects are still allowed.
• Penalty -2 when the policy does not cover lending and underwriting.

Penalties do not apply below score 1. The total penalties in a sector cannot exceed the number of points earned by the financial institution regarding this specific sector.

Remarks

* The company has committed not to develop new oil and gas upstream projects.

** The company has committed not to develop new oil and gas upstream and midstream projects, as production reduction in the IEA 1.5°C Scenario relies on production decline from existing assets.

A phase-out from unconventional sectors exceeding 2040 is not considered.

“Reclaim Finance reserves the right to equate a long-term commitment with the adoption of robust relative and/or absolute thresholds in the short term.

• Unconventional thresholds considered as phase-out: a relative threshold of 5% based on a production metric or an absolute threshold of 2 mmboe.
• Conventional oil & gas upstream thresholds considered as phase-out: an absolute threshold of 20 mmboe.
• Conventional oil & gas upstream & midstream thresholds: a relative threshold of 5% fossil fuel share of revenues.”

Reclaim Finance reserves the right to equate a phase-out applied to the financial institution itself with the request for a phase-out to financed companies. The request for a phase-out strategy to the company must be done within a well-defined framework (well-defined duration of engagement, restriction of financing in case of engagement failure). If the exclusion does not apply within 3 years, then a penalty -1 will be applied.

• Reclaim Finance will assess each policy on oil and gas expansion based on the Global Oil & Gas Exit List. We will contact each financial institution in order to get precise information. If there are any doubts, we reserve the right to apply the following penalties:
• Penalty -1 when the exclusion does not cover companies that plan to develop new oil and gas capacity through the purchase of existing oil and gas assets without a clear commitment to close or sell them.
• Penalty -1 when the policy is not applied to all assets/financial services.
• Penalty -1 when bonds are not sold or when it only concerns new coverage/investments.
• Penalty -1 when the exclusion is limited to offshore OR onshore activities.
• Penalty -1 when the exclusion is limited on a specific geographic scope (e.g. limited definition of the Arctic region).
• Penalty -1 when the exclusion is limited to oil OR gas.
• Penalty -1 when exceptions are minimal, -2 when exceptions are significant.
• Penalties do not apply below score 1 and apply only if the initial calculation of excluded expansion plans does not already take this information into account.

• Penalty -1 if phase-out commitment from unconventional sectors apply between 2031 and 2040. Phase-out after 2040 for unconventional sectors are not considered.
• Penalty -1 if phase-out commitment applies only partially along the value chain ; applying only to unconventional sectors.
• Penalty -1 when exceptions are minimal, -2 when exceptions are significant.
• Penalty -2 if phase-out commitment only covering lending and not underwriting or only a small part of the assets owned/managed.
• Penalty -1 if phase-out commitment applies only to new financing/coverage and not existing financing/coverage.
• Penalty -2 if commitment only applies to financed companies and not to the financial player itself.
• Penalty -2 if financial services dedicated to oil or gas projects are still allowed.
• Penalties do not apply below score 1.
• The total penalties in a sector cannot exceed the number of points earned by the financial institution regarding this specific sector.

Grade	UNCONVENTIONAL SECTOR POLICY
	No public policy regarding this sector.
	Very partial exclusion of oil AND/OR gas activities in this sector: relative or absolute threshold too high, phase-out date too far away, no exclusion of companies with expansion plans and limited exclusion of projects in this sector, etc.
	One of the following four conditions: Exclusion threshold below 10% of revenues or any equivalent cumulative threshold for upstream AND midstream activities in this sector; Exclusion threshold below 20% of reserves or production or any equivalent cumulative threshold for upstream activities in this sector; Complete exclusion of financial services dedicated to upstream AND midstream projects in this sector; Explicit partial exclusion of companies planning to develop new oil and/or gas capacity in this sector. OR  has announced a phase-out strategy from oil and gas upstream OR midstream activities in this sector by 2030 AND one of the following two conditions: Has adopted at least a relative exclusion threshold; Partial exclusion of projects in this sector.
	Two of the following three conditions: Exclusion of some companies planning to develop new oil AND gas capacity in this sector; Has announced a phase-out strategy from oil and gas upstream AND midstream activities in this sector by 2030; Exclusion threshold below 10% of reserves or production or any equivalent cumulative threshold for upstream activities in this sector. AND For relevant financial institutions, exclusion of financial services dedicated to upstream and midstream projects in this sector. AND Has adopted an exhaustive definition of the Arctic area: AMAP* definition or another definition covering at least 75% of the AMAP region. OR Exclusion of all companies planning to develop new upstream oil AND gas capacity in all unconventional sectors according to the Global Oil and Gas Exit List or any equivalent database
	Exclusion of all companies planning to develop new oil AND gas capacity in this sector : upstream AND midstream. AND Has announced a phase-out strategy from oil and gas upstream and midstream activities in this sector by 2030. AND For relevant financial institutions, exclusion of financial services dedicated to upstream and midstream projects in this sector. AND Has adopted an exhaustive definition of the Arctic area: AMAP* definition or equivalent in terms of geographical coverage.

* Scope defined and used by the Arctic Monitoring Assessment Programme (AMAP).
Penalties of projects, expansion and phase-out criteria will be taken into account and could lead to the downgrading of the financial institution in the concerned sector.