Analysing the quality of oil & gas policies

The good, the bad and the in-between of the oil and gas policies adopted by financial institutions

0%

of financial institutions assessed still have no oil and gas policy.

0

financial institutions assessed have committed to restrict their support to oil and gas developers.

0%

of financial institutions assessed have not adopted any commitments to limit their support to the development of LNG infrastructure.

0

oil and gas policies adopted or updated since January 2023.

Why track oil and gas policies?

Science is clear. It is imperative to stop developing new upstream and midstream oil and gas projects and rapidly reduce the global oil and gas productionin order to avoid a climate breakdown.

Banks, insurers and investors are increasingly adopting decarbonization targets for the oil and gas sector but these are, on their own, insufficient to achieve a 1.5-aligned decline of the oil and gas industry. In fact, meeting this challenge requires banks, insurers and investors to also adopt robust oil and gas policies that immediately tackle oil and gas expansion while progressively drying up financial services to the whole industry.

The Oil and Gas Policy Tracker is designed to track the commitments taken by top financial institutions worldwide, highlight the good practices, and expose the flaws and loopholes to be avoided. Its primary objective is simple: to ensure that the financial sector is adopting effective oil and gas policies to forcefully contribute to the 1.5°C climate goal.

Financial institutions must tackle the oil and gas industry in addition to the coal sector, the exit of which remains a major challenge. Moreover, phasing out all financial services to the fossil industry won’t be possible without financial institutions increasing their support to sustainable energies. Please check our Coal Policy Tracker and Sustainable Power Policy Tracker.

Use the tracker

385 financial institutions are assessed in the Oil & Gas Policy Tracker. Last policy update: September 2024

This financial institution has one of the most robust oil and gas policies.

This financial institution has informed Reclaim Finance that it is working on a new policy which is expected to be published soon.

NA The criterion does not apply to this type of financial institution.

Reclaim Finance could not give a definite score and has contacted the financial institution for clarification.

How to read the results

  • This criterion rates the immediate exclusion of financial services dedicated to oil and gas projects.

    Grade Projects
    0 No public policy
    1 Exclusion of financial services dedicated to upstream projects in 1 or 2 unconventional sectors.
    2 Exclusion of financial services dedicated to upstream projects in 3 unconventional sectors.

    OR

    Exclusion of financial services dedicated to oil & gas field exploration projects.
    3 Exclusion of financial services dedicated to all unconventional oil & gas upstream projects.

    OR

    Exclusion of some conventional and unconventional oil & gas projects: geographic disparities, potentially large exceptions, partial value chain, new oil OR gas fields, etc.
    4 Exclusion of financial services dedicated to all unconventional oil & gas upstream and midstream projects.

    OR

    Exclusion of financial services dedicated to only oil OR gas upstream projects.
    5 Exclusion of financial services dedicated to new oil & gas fields.
    6 Exclusion of financial services dedicated to all oil & gas upstream projects.
    7 Exclusion of financial services dedicated to new oil & gas fields and some midstream projects.
    8 Exclusion of financial services dedicated to new oil & gas fields and all midstream projects.
    9 Exclusion of financial services dedicated to all oil & gas upstream projects and some midstream projects.
    10 Exclusion of financial services dedicated to all oil & gas upstream projects and all midstream projects.

    Bonus & penalties

    • [Unconventional] Bonus +1 if midstream projects (infrastructure exclusively or mostly dedicated to unconventional) are excluded.
    • [Unconventional] Bonus +1 when the definition of unconventional sectors is complete according to Urgewald’s Global Oil & Gas Exit List. Excluding oil & gas extraction located in the Amazon can also be considered.
    • Bonus +1 when some downstream projects (fossil fuel-fired power plants, refineries, petrochemical projects, etc.) are excluded.
    • [Unconventional] Penalty -1 when the exclusion of unconventional projects is linked to the company’s involvement in oil & gas activities (1).
    • [Unconventional] Penalty -1 when the exclusion is limited by a restrictive definition of the unconventional sector (e.g. limited/no definition of the Arctic region, offshore or onshore, oil or gas, etc.).
    • Penalty -1 when the definition of “new oil & gas field” is much more restrictive than “any oil & gas field not yet in production” (2).
    • Penalty -1 when exceptions are minimal, -2 when exceptions are significant.
    • Penalty -1 when the policy does not cover all financial services dedicated to a specific project.

    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.

    1. Example: exclusion of financial services dedicated to oil and gas projects carried out by companies deriving more than X% of their production from the Arctic region.
    2. A financial institution will not be penalized if it defines “new oil & gas fields” as “any fields approved for development after December 31st, 2021”, as the definition is aligned with the IEA”s recommendation. However, a financial institution will be penalized if its definition of “new oil & gas fields” is very restrictive, e.g. any oil & gas field that received its Final Investment Decision after December 31st, 2022.

    Remarks

    Our assessment considers the following 4 unconventional sectors: Arctic oil & gas, shale oil & gas, tar sands, ultra-deep water oil & gas activities. The OGPT will also consider as a bonus a broader definition of unconventional oil & gas, as specified in the Global Oil & Gas Exit List: Arctic oil & gas, shale oil & gas, tar sands, ultra-deep water oil & gas, coalbed methane and extra-heavy oil. Excluding oil & gas extraction located in the Amazon can also be considered.

    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.

    *New oil & gas fields which are not producing yet.

    This criterion rates the quality of oil & gas phase-out commitments (considering both long-term and medium-term commitments).

    Grade EXPANSION COMPANIES
    0 No policy.
    1 When assessing companies, “oil & gas expansion” is a criterion that can lead to undefined sanctions.
    2 Conditions financial services to the end of new oil & gas projects, but no timeline specified or only applied to new clients.
    3 Conditions financial services to the end of new oil & gas projects, but weak coverage of the O&G industry (exceptions, 1 unconventional sector, etc.) by the end of 2023.

    OR

    Conditions financial services to the end of new oil & gas projects, but applied between 2026 and 2030.
    4 Conditions financial services to the end of new oil & gas upstream projects in some unconventional sectors by the end of 2023.

    OR

    Conditions financial services to the end of new oil & gas upstream projects by the end of 2025, with exceptions for some undefined companies.
    5 Conditions financial services to the end of new unconventional oil & gas upstream projects by the end of 2023.
    6 Conditions financial services to the end of new oil & gas upstream projects by the end of 2025.
    7 Conditions financial services to the end of new oil & gas upstream projects by the end of 2024.
    8 Conditions financial services to the end of new oil & gas upstream projects by the end of 2023.

    OR

    Conditions financial services to the end of new oil & gas upstream and midstream projects by the end of 2025.
    9 Conditions financial services to the end of new oil & gas upstream and midstream projects by the end of 2024.
    10 Conditions financial services to the end of new oil & gas upstream and midstream projects by the end of 2023.
    Bonus & penalites
    • Bonus +1 the end of some downstream expansion (fossil fuel-fired power plants, refineries) is a request leading to financing restrictions.
    • [Unconventional] Penalty -1/2 if commitment only applied by 2024/2025.
    • [Unconventional] Penalty -1 when the definition of the unconventional sector is restrictive (e.g. limited/no definition of the Arctic region, offshore or onshore, oil or gas, etc.).
    • [For scores between 1 and 8] Penalty -2 if commitment only applies to oil or gas.
    • Penalty -1 when a delimited number of companies benefit from an exception.
    • Penalty -1 when the deadline considered for the Final Investment Decision of new oil & gas upstream projects is set at a later date than December 31st, 2021.
    • Penalty -1 when a commitment only applies to some oil & gas upstream expansion plans or to oil & gas upstream and some midstream expansion plans.
    • 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

    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.

    This criterion rates the quality of oil & gas phase-out commitments (considering both long-term and medium-term commitments).

    Grade PHASE OUT
    0 No policy.
    1 “Oil and gas production plan” is a criterion that can lead to undefined sanctions.

    OR

    The financial institution has adopted weak*** 2030 targets for the oil & gas industry.
    2 Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil and gas production.

    OR

    The financial institution has adopted comprehensive*** 2030 targets for the oil & gas industry.
    3 The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    OR

    The financial institution has adopted a phase-out date for unconventional oil and gas activities by 2030.

    OR

    Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil and gas production by 2030.
    4 The financial has adopted a phase-out date for oil & gas upstream activities by 2050.
    AND     Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil & gas production.OR The financial institution has adopted a phase-out date for unconventional oil and gas activities by 2030.
    AND In the short term, conditions financial services to an immediate commitment to reduce unconventional oil & gas production by 2030.
    5 The financial institution has announced a phase-out date for oil & gas upstream activities by 2050.
    AND Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil & gas production by 2030.
    6 The financial institution has announced a phase-out date for oil & gas upstream activities by 2050.
    AND Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil & gas production by 2030, aligned with a 1.5°C scenario with no or low overshoot and low reliance on negative emissions*.OR In the short term, conditions financial services to an immediate commitment to reduce both oil & gas production by 2030.
    7 The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.
    AND In the short term, conditions financial services to an immediate commitment to reduce both oil & gas production by 2030.
    8 In the short term, conditions financial services to an immediate commitment to reduce both oil & gas production by 2030, aligned with a 1.5°C scenario with no or low overshoot and low reliance on negative emissions*.
    9 The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.
    AND In the short term, conditions financial services to an immediate commitment to reduce both oil & gas production by 2030, aligned with a 1.5°C scenario with no or low overshoot and low reliance on negative emissions and low reliance on negative emissions*.
    10 The financial institution has adopted a phase-out date for oil and gas upstream and midstream activities by 2050.
    AND In the short term, conditions financial services to an immediate commitment to reduce both oil & gas production by 2030, aligned with a 1.5°C scenario with no or low overshoot and low reliance on negative emissions**.

    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.
    • Bonus +1/2 if, in the short term, the financial institution will implement exclusion thresholds that correspond to an exit of some or all oil and gas upstream and midstream activities.
    • [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;

    OR

    • if developing new oil & gas assets, closing existing oil & gas assets in order to stay within a 1.5°C pathway: closing assets should total an equivalent amount of resources and, if possible, a similar production profile as developing assets. Sold assets must not be considered when assessing oil & gas production reduction aligned with a 1.5°C scenario.

    ** the company has committed:

    • not to develop new oil and gas upstream and midstream projects;

    OR

    • if developing new oil & gas assets, closing existing oil & gas assets in order to stay within a 1.5°C pathway: closing assets should total an equivalent amount of resources and, if possible, a similar production profile as developing assets. Sold assets must not be considered when assessing oil & gas production reduction aligned with a 1.5°C scenario.

    ***Weak targets are absolute or intensity targets with some of the following criteria:

    • scope 1, 2 and 3 covered;
    • at least upstream activities covered. We recommend the financial institution to cover both upstream and midstream activities;
    • at least lending services covered. We recommend that the financial institution adopt mid-term targets covering also underwriting services;
    • at least a target based on CO2 measurements. We recommend that the financial institution present separate targets for CO2 and methane;
    • ambitious reduction targets, with goals for 2030 reduction that are almost aligned with the global figures set in the IEA’s net zero scenario.

    ***Comprehensive oil & gas targets are:

    • absolute targets;
    • scope 1, 2 and 3 covered;
    • at least upstream activities covered. We recommend that the financial institution cover both upstream and midstream activities;
    • at least lending services covered. We recommend that the financial institution adopt mid-term targets covering also underwriting services;
    • at least a target based on CO2 equivalent measurements. We recommend that the financial institution present separate targets for CO2 and methane;
    • ambitious reduction targets, with goals for 2030 reduction that are aligned with or exceed the global figures set in the IEA’s net zero scenario.

    Very weak targets do not allow to score points.

    A phase-out for unconventional sectors after 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.

    When scoring commitments targeting ultradeep water oil & gas activities, the depth is considered. We define ultradeep water as offshore wells below 1,500 meters.

    Reclaim Finance reserves the right to equate the above relative thresholds with other equivalent relative or absolute thresholds.

    Grade PHASE OUT
    No policy.
    Weak commitments against this unconventional sector: very partial exclusion of the sector, weak engagement commitments, etc.
    One of the following criteria:

    • Exclusion of financial services to companies deriving more than 20% of their production from this unconventional sector;
    • Exclusion of financial services to companies deriving more than 5% of revenues from this unconventional sector;
    • Exclusion of financial services dedicated to upstream and midstream projects in this unconventional sector;
    • Conditions financial services to the end of some new oil & gas upstream projects in this unconventional sector;
    • Has announced a phase-out strategy for the unconventional sector by 2030 and has adopted a short-term exclusion criterion for this unconventional sector.
    Condition financial services to the end of unconventional oil & gas expansion.*

    OR

    Exclusion of financial services dedicated to upstream and midstream projects in this unconventional sector
    AND Two of the following criteria:

    • Exclusion of financial services to companies deriving more than 10% of their production from this unconventional sector;
    • Conditions financial services to the end of new oil & gas upstream projects in this unconventional sector;
    • Has announced a phase-out strategy for the unconventional sector by 2030 or demands an immediate commitment to reduce oil & gas production by 2030.

    [Arctic] Adoption of an exhaustive definition of the Arctic area: AMAP definition or another definition covering at least 75% of the AMAP region.

    [Ultradeep water] Adoption of an exhaustive definition of “ultradeep”: offshore wells below 1500 meters.
    Three criteria:

    • Exclusion of financial services to dedicated upstream and midstream projects in this unconventional sector;
    • Conditions financial services to the end of new oil & gas upstream projects in this unconventional sector;
    • Has announced a phase-out strategy for the unconventional sector by 2030 or conditions financial services to an immediate commitment to reduce oil & gas production by 2030.

    [Arctic] Adoption of an exhaustive definition of the Arctic area: AMAP definition or equivalent in terms of geographical coverage.

    [Ultradeep water] Adoption of an exhaustive definition of “ultradeep”: offshore wells below 1500 meters.

    Bonus & penalties

    Bonus and penalties of projects, expansion and phase-out criteria may apply and lead to the downgrading of the financial institution in the concerned sector.

    Remarks

    *This criterion does not apply to one unconventional sector, but to a complete definition of the unconventional sectors (shale oil & gas, tar sands, Arctic oil & gas, ultra-deep water oil & gas, extra-heavy oil, coalbed methane).

    When scoring commitments targeting Arctic oil & gas activities, the definition of the region is considered. Reclaim Finance recommends using the Arctic Monitoring Assessment Programme’s (AMAP) definition, which is the most extensive one, and is based on environmental and climate factors.

    When scoring commitments targeting ultradeep water oil & gas activities, the depth is considered. We define ultradeep water as offshore wells below 1,500 meters.

    Reclaim Finance reserves the right to equate the above relative thresholds with other equivalent relative or absolute thresholds.

  • Investors are not assessed on the “Projects” criterion.

    This criterion rates how investors condition financial services to the end of oil & gas expansion plans.

    Grade EXPANSION COMPANIES
    0 No policy.
    1 When assessing companies, “oil and gas expansion” is a criterion that can lead to undefined sanctions.
    2 No new investments in companies that develop oil and gas projects, but no timeline specified.
    3

    By the end of 2023, no new investments in companies that develop oil and gas projects, but weak coverage of the oil and gas industry (exceptions, 1 unconventional sector, etc.).

    OR

    By the end of 2030, no new investments in some companies that develop oil and gas projects.
    4

    By the end of 2023, no new investments in companies that develop oil and gas upstream projects in some unconventional sectors.

    OR

    Systematic and defined sanctions for some companies in portfolio that continue to develop oil and gas projects.

    OR

    By the end of 2025, no new investments in some companies that develop oil and gas projects, with large exceptions.
    5

    By the end of 2023, no new investments in companies that develop unconventional oil and gas upstream projects.

    OR

    By the end of 2025, no new investments in companies that develop oil and gas upstream projects.
    6

    By the end of 2025, no new investments in companies that develop oil and gas upstream projects.

    AND Systematic and strong defined sanctions for companies in portfolio that continue to develop oil and gas upstream projects.
    7

    By the end of 2024, no new investments in companies that develop oil and gas upstream projects.

    AND Systematic and strong defined sanctions for companies in portfolio that continue to develop oil and gas upstream projects.

    OR

    By the end of 2025, no new investments in companies that develop oil and gas upstream and midstream projects.
    8

    By the end of 2023, no new investments in companies that develop oil and gas upstream projects.

    AND Systematic and strong defined sanctions for companies in portfolio that continue to develop new oil and gas upstream projects.

    OR

    By the end of 2025, no new investments in companies that develop oil and gas upstream and midstream projects.

    AND Systematic and strong defined sanctions for companies in portfolio that continue to develop oil and gas upstream and midstream projects.
    9

    By the end of 2024, no new investments in companies that develop oil and gas upstream and midstream projects.

    AND Systematic and strong defined sanctions for companies in portfolio that continue to develop oil and gas upstream and midstream projects.
    10

    By the end of 2023, no new investments in companies that develop oil and gas upstream and midstream projects.

    AND Systematic and strong sanctions for companies in portfolio that continue to develop oil and gas upstream and midstream projects.

    Bonus & penalties

    • Bonus +1 the end of some downstream expansion (oil or gas-fired power plants, refineries, etc.) is a request leading to investment restrictions.
    • Bonus +1 when bonds are divested by 2025.
    • [Unconventional] Penalty -1/2 if commitment only applied by 2024/2025.
    • [Unconventional] Penalty -1 when the definition of the unconventional sector is restrictive (e.g. limited/no definition of the Arctic region, offshore or onshore, oil or gas, etc.).
    • [For scores between 1 and 8] Penalty -2 if commitment only applies to oil or gas.
    • [For scores between 1 and 8] Penalty -1 when no sanctions are taken for companies in portfolio that continue to develop new oil and gas upstream projects.
    • Penalty -1 when a delimited number of companies benefit from an exception.
    • Penalty -1 when the deadline considered for the Final Investment Decision of new oil & gas upstream projects is set at a later date than December 31st, 2021.
    • Penalty -1 when a commitment only applies to some oil & gas upstream expansion plans or to oil & gas upstream and some midstream expansion plans.
    • Penalty -2 when the policy only covers new investments in shares.
    • Penalty -1/2 when the policy does not apply to a significant part of assets.
    • Penalties do not apply below score 1.

    Remarks

    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.
    The following four unconventional sectors must be covered in order to get points at levels 4 and 5: Arctic oil and gas, shale oil and gas, tar sands, and ultra-deep water oil and gas. Reclaim Finance recommends using the GOGEL’s definition of unconventional, and the database to identify and exclude companies with unconventional oil and gas expansion plans.

    This criterion rates the quality of oil & gas phase-out commitments (considering both long-term and medium-term commitments).

    Grade PHASE OUT
    0 No policy
    1 When assessing companies, “oil and gas production plan” is a criterion that can lead to undefined sanctions.
    2 Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil and gas production.
    3

    The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    OR

    The financial institution has adopted a phase-out date for unconventional oil and gas activities by 2030.

    OR

    Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil and gas production by 2030.
    4

    The financial institution has adopted a phase-out date for oil and gas upstream and midstream activities by 2050.

    OR

    Systematic and defined sanctions for companies that do not immediately commit to reduce their oil and gas production by 2030.

    OR

    The financial institution has adopted a phase-out date for unconventional oil and gas activities by 2030.

    AND In the short term, no new investments in companies that do not immediately commit to reduce their unconventional oil and gas production before 2030.
    5

    Systematic and strong defined sanctions for companies that do not immediately commit to reduce their oil and gas production by 2030.

    OR

    The financial institution has adopted a phase-out date for unconventional oil and gas activities by 2030.

    AND In the short term, no new investments in companies that do not immediately commit to reduce their unconventional oil and gas production before 2030.

    AND Systematic and strong defined sanctions for companies that did not commit to reduce their unconventional oil and gas production before 2030.
    6

    Systematic and defined strong sanctions for companies that do not immediately commit to reduce their oil and gas production by 2030, aligned with a 1.5°C scenario with low or no overshoot and low reliance on negative emissions*.

    OR

    The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    AND Systematic and strong defined sanctions for companies that do not immediately commit to reduce their oil and gas production by 2030.
    7

    The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    AND Systematic and defined strong sanctions for companies that do not immediately commit to reduce their oil and gas production by 2030, aligned with a 1.5°C scenario with low or no overshoot and low reliance on negative emissions*.

    OR

    The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    AND In the short term, no new investments in companies that do not immediately commit to reduce their oil and gas production by 2030.
    8

    The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    AND In the short term, no new investments in companies that do not immediately commit to reduce their oil and gas production by 2030.

    AND Systematic and strong defined sanctions for companies in portfolio that did not commit to reduce their oil and gas production by 2030, aligned with a 1.5°C scenario with low or no overshoot and low reliance on negative emissions*.

    OR

    The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    AND In the short term, no new investments in companies that do not immediately commit to reduce their oil and gas production by 2030, aligned with a 1.5°C scenario with low or no overshoot and low reliance on negative emissions*.
    9

    The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    AND In the short term, no new investments in companies that do not immediately commit to reduce their oil and gas production by 2030, aligned with a 1.5°C scenario with low or no overshoot  and low reliance on negative emissions*.

    AND Systematic and strong defined sanctions for companies in portfolio that did not commit to reduce their oil and gas production by 2030, aligned with a 1.5°C with low or no overshoot and low reliance on negative emissions*.
    10

    The financial institution has adopted a phase-out date for oil and gas upstream AND midstream activities by 2050.

    AND In the short term, no new investments in companies that do not immediately commit to reduce their oil and gas production by 2030, aligned with a 1.5°C scenario with low or no overshoot and low reliance on negative emissions**.

    AND Systematic and strong defined sanctions for companies in portfolio that did not immediately commit to reduce their oil and gas production by 2030, aligned with a 1.5°C with low or no overshoot and low reliance on negative emissions**.

    Bonus & Penalties

    • Bonus +1/2 if additional commitment to phase out oil and gas-fired power generation activities by 2040 worldwide/and by 2030 in OECD countries.
    • Bonus +1/2 if, in the short term, the financial institution will implement exclusion thresholds that correspond to an exit of some or all oil and gas upstream and midstream activities.
    • [Unconventional] Penalty -1 if phase-out commitment for 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 -1/2 when the policy does not apply to a significant part of assets.
    • Penalty -2 when the policy only covers new investments in shares.
    • Penalty -1 if phase-out commitment applies only to new investments and not divestment.
    • 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;

    OR

    • if developing new oil & gas assets, closing existing oil & gas assets in order to stay in a 1.5°C pathway: closed assets should total an equivalent amount of resources and, if possible, a similar production profile as developing assets. Sold assets must not be considered when assessing oil & gas production reduction aligned with a 1.5°C scenario.

    ** The company has committed:

    • not to develop new oil and gas upstream and midstream projects;

    OR

    • if developing new oil & gas assets, closing existing oil & gas assets in order to stay in a 1.5°C pathway: closed assets should total an equivalent amount of resources and, if possible, a similar production profile as developing assets. Sold assets must not be considered when assessing oil & gas production reduction aligned with a 1.5°C scenario.

    A phase-out from unconventional sectors after 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.

    This criterion rates policies by sector taking into account exclusion at the project level, exclusion of companies with expansion plans, companies above a certain relative or absolute threshold and a phase-out strategy for the sector.

    Our assessment considers the following 4 unconventional sectors: Arctic oil and gas, shale oil and gas, tar sands, ultra-deep water activities. As a reminder, investors are not assessed on their project-level exclusions anymore; hence, this kind of exclusion will not be considered on this criterion.

    Grade UNCONVENTIONAL SECTOR POLICY
    No policy
    Weak commitments regarding this unconventional sector: very partial exclusion of the sector, weak engagement commitments, etc.

    The financial institution meets one of the following criteria:

    – No new investments in companies deriving more than 20% of their production from this unconventional sector;

    – No new investments in companies deriving more than 5% of revenues from this unconventional sector;

    – Systematic and defined sanctions for companies in portfolio that continue to develop new oil and gas projects in this unconventional sector;

    – Systematic and defined sanctions for companies that do not immediately commit to reduce their oil and gas production in this unconventional sector;

    – Has announced a phase-out strategy for the unconventional sector by 2030 and has adopted a short-term exclusion criterion for this unconventional sector.

    The financial institution meets two of the following criteria:

    – No new investments in companies deriving more than 10% of their production from this unconventional sector;

    – No new investments in some companies that develop new oil & gas upstream projects in this unconventional sector;

    – Has announced a phase-out strategy for the unconventional sector by 2030 OR systematic and defined sanctions for companies that do not immediately commit to reduce their oil and gas production in this unconventional sector before 2030.

    OR

    The financial institution conditions new investments to the end of unconventional oil and gas expansion.*

    [Arctic] Adoption of an exhaustive definition of the Arctic area: AMAP definition or another definition covering at least 75% of the AMAP region.

    [Ultradeep water] Adoption of an exhaustive definition of “ultradeep”: offshore wells below 1500 meters.

    The financial institution meets the following three criteria:

    – No new investments in companies that develop new oil and gas upstream and midstream projects by the end of 2023 in this unconventional sector.

    – Systematic and strong sanctions for companies in portfolio that continue to develop new oil and gas upstream and midstream projects in this unconventional sector.

    – Has announced a phase-out strategy for the unconventional sector by 2030 or for oil and gas upstream activities by 2050 OR systematic and defined strong sanctions for companies that do not immediately commit to reduce their oil and gas production in this unconventional sector by 2030.

    [Arctic] Adoption of an exhaustive definition of the Arctic area: AMAP definition or equivalent in terms of geographical coverage.

    [Ultradeep water] Adoption of an exhaustive definition of “ultradeep”: offshore wells below 1500 meters.
    Bonus / Penalties
    Penalties of expansion and phase-out criteria will be taken into account and could lead to the downgrading of the financial institution in the concerned sector.

    Remarks
    * This criterion does not apply to one unconventional sector, but to a complete definition of the unconventional sectors (shale oil & gas, tar sands, Arctic oil & gas, ultra-deep water oil & gas, extra-heavy oil, coalbed methane).When scoring commitments against Arctic oil & gas activities, the definition of the region is considered. Reclaim Finance recommends the Arctic Monitoring Assessment Programme’s (AMAP) definition. This definition of the area is based on environmental and climate factors.Reclaim Finance reserves the right to equate the above relative thresholds with other equivalent relative or absolute thresholds.

  • This criterion rates the immediate exclusion of insurance coverage dedicated to oil and gas projects.

    Grade Projects
    0 No public policy
    1 Exclusion of insurance coverage for upstream projects in 1 unconventional sector.
    2 Exclusion of insurance coverage for upstream projects in 2 unconventional sectors.
    3 Exclusion of insurance coverage for upstream projects in 3 unconventional sectors.

    OR 

    Exclusion of insurance coverage for oil and gas field exploration projects.
    4 Exclusion of insurance coverage for all unconventional oil and gas upstream projects.

    OR

    Exclusion of some conventional and unconventional oil and gas projects: geographic disparities, potentially large exceptions, partial value chain, new oil OR gas fields, etc.
    5 Exclusion of insurance coverage for all unconventional oil and gas upstream and midstream projects.
    6 Exclusion of insurance coverage for upstream oil OR gas projects.
    7 Exclusion of insurance coverage for new oil and gas fields.
    8 Exclusion of insurance coverage for oil and gas upstream projects.

    OR

    Exclusion of insurance coverage for new oil and gas fields and some midstream projects.
    9 Exclusion of insurance coverage for oil and gas upstream projects and some midstream projects.
    10 Exclusion of insurance coverage for oil and gas upstream projects and all midstream projects.

    Bonus & Penalties

    • [Unconventional] Bonus +1 if midstream projects (infrastructure exclusively or mostly dedicated to unconventional) are excluded.
    • [Unconventional] Bonus +1 when the definition of unconventional sectors is complete according to Urgewald’s Global Oil & Gas Exit List. Excluding oil and gas extraction located in the Amazon can also be considered.
    • Bonus +1 when some downstream projects (fossil fuel-fired power plants, refineries, petrochemical projects, etc.) are excluded.
    • [Unconventional] Penalty -1 when the exclusion of unconventional projects is linked to the company’s involvement in oil and gas activities (1).
    • [Unconventional] Penalty -1 when the exclusion is limited by a restrictive definition of the unconventional sector (e.g. limited/no definition of the Arctic region, offshore or onshore, oil or gas, etc.).
    • Penalty -1 when the definition of “new oil & gas field” is much more restrictive than “any oil & gas field not yet in production” (2).
    • Penalty -1 when exceptions are minimal, -2 when exceptions are significant.
    • 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.
    1. Example: exclusion of financial services dedicated to oil and gas projects carried out by companies deriving more than X% of their production from the Arctic region.
    2. A (re)insurer will not be penalized if it defines “new oil & gas fields” as “any fields approved for development after December 31st, 2021”, as the definition is aligned to the IEA”s recommendation. However, a financial institution will be penalized if its definition of “new oil & gas fields” is very restrictive, e.g. any oil & gas field that received its Final Investment Decision after December 31st, 2022.

    Remarks

    Our assessment considers the following 4 unconventional sectors: Arctic oil & gas, shale oil & gas, tar sands, ultra-deep water oil & gas activities. The OGPT will also consider as a bonus a broader definition of unconventional oil & gas, as specified in the Global Oil & Gas Exit List: Arctic oil & gas, shale oil & gas, tar sands, ultra-deep water oil & gas, coalbed methane and extra-heavy oil. Excluding oil & gas extraction located in the Amazon can also be considered.

    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 LNG infrastructure;
    •  Capacity increase of existing infrastructure.

    *New oil & gas fields which are not producing yet

    For this criterion, we consider the following insurance products:

    • Standalone or single-site coverage for insurers
    • Facultative reinsurance and direct insurance for reinsurers

    We mainly consider the following risk:

    Engineering Lines (Construction All Risk – CAR or Erection All Risk – EAR)”

    This criterion rates how insurers condition insurance coverage to the end of oil & gas expansion plans.

    Grade EXPANSION COMPANIES
    0 No public policy.
    1 When assessing companies, “oil and gas expansion” is a criterion that can lead to undefined sanctions.
    2 Conditions insurance dedicated to existing oil and gas assets to the end of oil & gas projects, but no timeline specified or only applied to new clients/new risks.
    3 Conditions insurance dedicated to existing oil and gas assets to the end of oil & gas projects, but weak coverage of the O&G industry (exceptions, 1 unconventional sector, etc.) by the end of 2023.

    OR

    Conditions insurance dedicated to existing oil and gas assets to the end of oil & gas projects, but applied between 2026 and 2030.
    4 Conditions insurance dedicated to existing oil and gas assets to the end of oil & gas upstream projects in some unconventional sectors by the end of 2023.

    OR

    Conditions insurance of existing oil and gas assets to the end of oil & gas upstream projects by the end of 2025, with exceptions for some undefined companies.
    5 Conditions insurance dedicated to existing oil and gas assets to the end of unconventional oil & gas upstream projects by the end of 2023.
    6 Conditions insurance dedicated to existing oil and gas assets to the end of oil & gas upstream projects by the end of 2025.
    7 Conditions insurance dedicated to existing oil and gas assets to the end of oil & gas upstream projects by the end of 2024.
    8 Conditions all insurance coverage to the end of oil & gas upstream projects by the end of 2023.

    OR

    Conditions all insurance coverage to the end of oil & gas upstream and midstream projects by the end of 2025.
    9 Conditions all insurance coverage to the end of oil & gas upstream and midstream projects by the end of 2024.
    10 Conditions all insurance coverage to the end of oil & gas upstream and midstream projects by the end of 2023.

    Bonus & penalties

    • Bonus +1 the end of some downstream expansion (fossil fuel-fired power plants, refineries) is a request leading to financing sanctions.
    • [Unconventional] Penalty -1/2 if commitment only applied by 2024/2025.
    • [Unconventional] Penalty -1 when the definition of the unconventional sector is restrictive (e.g. limited/no definition of the Arctic region, offshore or onshore, oil or gas, etc.).
    • [For scores between 1 and 8] Penalty -2 if commitment only applies to oil or gas.
    • Penalty -1 when a delimited number of companies benefit from an exception.
    • Penalty -1 when the deadline considered for the Final Investment Decision of new oil & gas upstream projects is set at a later date than December 31st, 2021.
    • Penalty -1 when a commitment only applies to some oil and gas upstream expansion plans or to oil and gas upstream and some midstream expansion plans.
    • Penalty -1 when the policy does not apply to all the lines of business* of/all risks covered by the insurer.
    • [For reinsurers/insurers with reinsurance activities] Penalty -1 when the restrictions do not apply to reinsurance treaties.
    • “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 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.

    For reinsurers: Exclusion of transferred risks from the ceding insurer for treaty reinsurance when the ultimate insured company has oil and gas upstream / and midstream expansion plans.

    *By all lines of business, we refer to:

    • P&C (Property & Casualty)
    • Engineering Lines (Construction All Risk – CAR)
    • Surety bonds

    This criterion rates the quality of oil & gas phase-out commitments (considering both long-term and medium-term commitments).

    Grade PHASE OUT
    0 No policy.
    1 “Oil and gas production plan” is a criterion that can lead to undefined sanctions.

    OR

    The financial institution has adopted weak*** 2030 targets for the oil & gas industry.
    2 Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil and gas production.

    OR

    The financial institution has adopted comprehensive*** 2030 targets for the oil & gas industry.
    3 The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    OR

    The financial institution has adopted a phase-out date for unconventional oil and gas activities by 2030.

    OR

    Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil and gas production by 2030.
    4 The financial institution has adopted a phase-out date for oil & gas upstream activities by 2050. AND Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil & gas production

    OR

    The financial institution has adopted a phase-out date for unconventional oil and gas activities by 2030.

    AND

    In the short term, conditions insurance coverage dedicated to existing oil and gas assets to an immediate commitment to reduce unconventional oil & gas production by 2030.
    5 The financial institution has announced a phase-out date for oil & gas upstream activities by 2050.

    AND

    Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil & gas production by 2030.
    6 The financial institution has announced a phase-out date for oil & gas upstream activities by 2050.

    AND

    Unsystematic but defined sanctions for companies that do not immediately commit to reduce their oil & gas production by 2030, aligned with a 1.5°C scenario with no or low overshoot and low reliance on negative emissions*.

    OR 

    In the short term, condition insurance coverage dedicated to existing oil and gas assets to an immediate commitment to reduce both oil & gas production by 2030.
    7 The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    AND

    In the short term, condition insurance coverage of existing oil and gas assets to an immediate commitment to reduce both oil & gas production by 2030.
    8 In the short term, condition insurance coverage dedicated to existing oil and gas assets to an immediate commitment to reduce both oil & gas production by 2030, aligned with a 1.5°C scenario with no or low overshoot and low reliance on negative emissions*.
    9 The financial institution has adopted a phase-out date for oil and gas upstream activities by 2050.

    AND

    In the short term, condition all insurance coverage to an immediate commitment to reduce both oil & gas production by 2030, aligned with a 1.5°C scenario with no or low overshoot and low reliance on negative emissions and low reliance on negative emissions*.
    10 The financial institution has adopted a phase-out date for oil and gas upstream and midstream activities by 2050.

    AND

    In the short term, condition all insurance coverage to an immediate commitment to reduce both oil & gas production by 2030, aligned with a 1.5°C scenario with no or low overshoot and low reliance on negative emissions**.

    Bonus & penalties

    • Bonus +1/2 if additional commitment to phase out oil and gas-fired power generation activities by 2040 worldwide/and by 2035 in OECD and European countries.
    • [Unconventional] Penalty -1 if phase-out commitment for 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 standalone insurance coverage/direct insurance/facultative reinsurance of oil or gas projects is still allowed.
    • Penalty -1 if the commitment does not apply to all lines of business****.
    • [For reinsurers/insurers with reinsurance activities] Penalty -1 when the restrictions do not apply to reinsurance treaties.
    • 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;

    OR

    – if developing new oil & gas assets, closing existing oil & gas assets in order to stay in a 1.5°C pathway: closing assets should total an equivalent amount of resources and, if possible, a similar production profile as developing assets. Sold assets must not be considered when assessing oil & gas production reduction aligned with a 1.5°C scenario.”
    **the company has committed:
    – not to develop new oil and gas upstream and midstream projects;

    OR

    – if developing new oil & gas assets, closing existing oil & gas assets in order to stay in a 1.5°C pathway: closing assets should total an equivalent amount of resources and, if possible, a similar production profile as developing assets. Sold assets must not be considered when assessing oil & gas production reduction aligned with a 1.5°C scenario.

    ***Weak targets are absolute or intensity targets with some of the following criteria:

    • scope 1, 2 and 3 covered;
    • at least upstream activities covered. We recommend the financial institution to cover both upstream and midstream activities;
    • at least a target based on CO2 measurements. We recommend the financial institution to present separate targets for CO2 and methane;
    • ambitious reduction targets, with goals for 2030 reduction that are almost aligned with the global figures set in the IEA’s net zero scenario.

    ***Comprehensive oil & gas targets are:

    • absolute targets;
    • scope 1, 2 and 3 covered;
    • at least upstream activities covered. We recommend the financial institution to cover both upstream and midstream activities;
    • at least a target based on CO2 equivalent measurements. We recommend the financial institution to present separate targets for CO2 and methane;
    • ambitious reduction targets, with goals for 2030 reduction that are aligned with the global figures set in the IEA’s net zero scenario.

    Very weak targets do not allow to score points.

    A phase-out for unconventional sectors after 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.

    ****By all lines of business, we refer to:

    • P&C (Property & Casualty)
    • Engineering Lines (Construction All Risk – CAR)
    • Surety bonds

    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.

    This criterion rates the exclusion of insurance coverage for some unconventional oil and gas sectors.

    Grade UNCONVENTIONAL SECTOR POLICY
    No policy.
    Weak commitments against this unconventional sector: very partial exclusion of the sector, weak engagement commitments, etc.
    One of the following criteria:

    • Exclusion of insurance coverage to companies deriving more than 20% of their production from this unconventional sector ;
    • Exclusion of insurance coverage to companies deriving more than 5% of revenues from this unconventional sector ;
    • Exclusion of insurance coverage for upstream projects in this unconventional sector ;
    • Condition insurance dedicated to existing oil and gas assets to the end of some new oil & gas upstream projects in this unconventional sector;
    • Has announced a phase-out strategy for the unconventional sector by 2030 and has adopted a short-term exclusion criterion for this unconventional sector.
    Conditions insurance coverage dedicated to existing oil and gas assets to the end of new unconventional oil and gas projects.*

    OR

    Exclusion of insurance coverage for upstream and midstream projects in this unconventional sector

    AND Two of the following criteria:

    • Exclusion of insurance coverage to companies deriving more than 10% of their production from this unconventional sector ;
    • Condition insurance coverage dedicated to existing oil and gas assets to the end of new oil and gas upstream projects in this unconventional sector ;
    • Has announced a phase-out strategy for the unconventional sector by 2030 or demands an immediate commitment to reduce oil & gas production by 2030.

    [Arctic] Adoption of an exhaustive definition of the Arctic area: AMAP definition or another definition covering at least 75% of the AMAP region.

    [Ultradeep water] Adoption of an exhaustive definition of “ultradeep”: offshore wells below 1500 meters.

    [Extra-heavy oil] Adoption of an exhaustive definition of “extra-heavy oil”: oil with API gravity < 15°.
    Three criteria:

    • Exclusion of insurance coverage for all upstream and midstream projects in this unconventional sector ;
    • Condition all insurance coverage to the end of new oil and gas upstream projects in this unconventional sector ;
    • Has announced a phase-out strategy for the unconventional sector by 2030 or conditions all insurance coverage to an immediate commitment to reduce oil & gas production by 2030.

    [Arctic] Adoption of an exhaustive definition of the Arctic area: AMAP definition or equivalent in terms of geographical coverage.

    [Ultradeep water] Adoption of an exhaustive definition of “ultradeep”: offshore wells below 1500 meters.

    [Extra-heavy oil] Adoption of an exhaustive definition of “extra-heavy oil”: oil with API gravity < 15°.

    Bonus & penalties

    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.

    Remarks

    *This criterion does not apply to one unconventional sector, but to a complete definition of the unconventional sectors (shale oil & gas, tar sands, Arctic oil & gas, ultra-deep water oil & gas, extra-heavy oil, coalbed methane).

    When scoring commitments against Arctic oil & gas activities, the definition of the region is considered. Reclaim Finance recommends the Arctic Monitoring Assessment Programme’s (AMAP) definition. This definition of the area is based on environmental and climate factors.

    Reclaim Finance reserves the right to equate the above relative thresholds with other equivalent relative or absolute thresholds.

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