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The United Nations has told banks including Citi, Goldman Sachs and BNP Paribas that their financing of Saudi Aramco could violate global human rights norms because of the state-run oil company’s contribution to climate change.
A panel of appointed United Nations human rights specialists has sent letters to Aramco and its funders, following a legal complaint filed in 2021 by the environmental campaign group ClientEarth that accused the Saudi oil company of the largest-ever violation of international human rights law related to climate by a company. .
Aramco is the world’s largest emitter of greenhouse gases. The burning of fossil fuels is the largest contributor to climate change, accounting for about 75 percent of global warming.
The concern is that Aramco’s continued production of crude oil and continued oil and gas exploration, among other issues, may constitute a violation of the Paris Agreement to limit the rise in global temperatures and a UN resolution that states that people have the right to a clean, healthy and sustainable life. environment.
The UN letter warns banks that if they are aware of a human rights issue but fail to take “reasonable steps” to prevent or mitigate the impact, “this may be considered as enabling the situation”.
“Companies must avoid violating human rights by proactively taking steps to identify, prevent, mitigate and address the negative impacts in which they are implicated, including from climate change,” the letter states.
“The alleged involvement of financial institutions in financing Saudi Aramco’s activities could constitute a violation of international human rights law and standards.”
Banks are already under scrutiny over their role in financing projects that contribute to climate change. While some set goals to reach net zero carbon emissions, many continue to fund new fossil fuel projects. And the International Energy Association said in 2021 that there may be no new fossil fuel projects if the world is to reach net zero emissions by 2050.
The letters, which were signed by five independent human rights experts appointed and authorized by the UN Human Rights Council, are not a legal ruling but can be cited in legal proceedings.
This is the first time that the United Nations has taken action against the oil industry and its financial backers in relation to the human rights implications of climate change.
ClientEarth said it was setting “a new legal standard for the human rights responsibilities of fossil fuel companies to the climate crisis.”
“United Nations experts could not be clearer: Banks bear their legal responsibility in relation to the mounting and detrimental threat that climate change poses to human rights.”
City declined to comment. “We are considering any communications from the United Nations in due course,” Goldman Sachs said.
HSBC said it was “committed to being transparent about the opportunities, challenges and progress we are making around environmental, social and governance issues”.
BNP Paribas and Aramco did not respond to requests for comment.
Additional reporting by Stephen Morris, Joshua Franklin, Stephen Gandel and Samer Alatrush.
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