French banks keep financing tobacco industry, despite promises

Since 2018, French banks have granted more than five billion dollars in loans to the tobacco industry, according to a report by the investigative organisation Profundo, commissioned by the French Alliance Against Tobacco (ACT) and published on Wednesday (6 March).

“The tobacco industry is able to maintain its deadly trade thanks to the resources provided by banks and investment funds,” Marion Catellin, director of the ACT-Alliance against Tobacco, said in a press release.

Between January 2018 and November 2023, French banks granted $5.3 billion ((€4.8 billion) in loans to tobacco companies, mainly to British American Tobacco ($2 billion, €1.8 billion), Philip Morris International ($1.3 billion, €1.2 billion), and Imperial Brands ($1 billion, €1 billion).

“These amounts are all the more outrageous in that they come directly from players who made a public commitment to cease all tobacco funding a few years ago,” added the ACT’s director.

In 2018, a large number of financial players signed the Tobacco Free-Finance Pledge, a charter drawn up by the Australian NGO Tobacco-Free Portfolio, encouraging all international lenders to stop supporting tobacco companies.

The French signatories include Société Générale, Crédit Agricole, and the BPCE group (Banque Populaire-Caisse d’Epargne).

But according to the Profundo report, Crédit Agricole and Société Générale kept financing the tobacco industry. Although Crédit Agricole stopped in 2021, Société Générale accounts for 83% of French financial support for the tobacco industry.

“The sector made a timid start to turning away from the tobacco industry in 2018, but five years later we can see that the establishments are struggling to meet their commitments,” said Catellin.

723 million dollars in investments

The report also revealed that French banks are not only granting loans to the tobacco industry but are also investing in this market: In November 2023, French banks invested 723 million dollars (664 million euros) in the tobacco industry.

In detail, this represents $307 million (€282 million) for PMI, $255 million for British American Tobacco (€234 million), and $78 million for Imperial Brand (€71 million).

40% of these funds came from the BPCE group, and more than 20% from Crédit Agricole.

“If French banks are still financing the tobacco industry, there is every reason to fear that elsewhere in Europe, financial institutions in Germany, Italy, and Belgium, for example, will be doing the same thing,” Martin Drago, ACT advocacy officer, told Euractiv.

“If we want to put a definitive end to this human and environmental scourge, we need the support and collaboration of all players, including those from the financial world”, concluded Catellin.

According to the World Health Organisation (WHO), tobacco is responsible for eight million deaths a year worldwide, including 1.3 million passive smokers.

Banks say embarking on ‘exit strategy’

Contacted by Euractiv, the three French banks mentioned by the report clarified the situation.

“CACIB [Crédit Agricole – Corporate Investment Bank] excludes all financing for the tobacco industry and closely monitors its exposure to ensure a rapid exit from the sector”, the Crédit Agricole told Euractiv in written comments.

The Société Générale said the bank was “aware of the environmental and social impacts associated with the tobacco sector” and thus has committed to “an exit strategy” from the sector. In September 2023, the Bank signed the Tobacco-Free-Finance-Pledge.

BPCE said on behalf of Natixis CIB that “Natixis CIB no longer provides financing to the tobacco industry. As regards investment on behalf of our clients, this mainly concerns two of our US asset management companies”.

“In our multi-affiliate model, these companies retain independence in their management policy, in line with their fiduciary obligations towards their investor clients.”

[Edited by Zoran Radosavljevic]

Read more with Euractiv

Sharp rise in sexually transmitted infections in Europe, warns EU health agency

The European Centre for Disease Prevention and Control (ECDC) warned that there is a need for action to address the significant rise in sexually transmitted infections (STIs) in the EU/EEA.