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The United Nations has told banks including Citigroup, Goldman Sachs and BNP Paribas that their financing of Saudi Aramco may violate global human rights rules because of the state oil company’s contribution to climate change.
A UN-appointed panel of human rights experts has written to Aramco and its financiers following a 2021 legal complaint by environmental campaign group ClientEarth alleging the largest-ever climate-related corporate breach of international human rights law by Saudi Aramco .
Saudi 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% of global warming.
The concern is that Saudi Aramco’s continued crude production and further exploration for oil and gas, among other issues, could violate the Paris Agreement to limit global temperature rise and UN resolutions that people have the right to a clean, healthy and sustainable environment .
The U.N. letter warns banks that if they become aware of human rights concerns but fail to take “reasonable steps” to prevent or mitigate the impact, they “will be deemed to have contributed to the situation”.
“Businesses should take proactive steps to identify, prevent, mitigate and address the adverse impacts they are involved in, including those caused by climate change, in order to avoid human rights abuses,” the letter said.
“The alleged involvement of financial institutions in financing Saudi Aramco’s activities may violate international human rights law and standards.”
The role of banks in financing projects that contribute to climate change has come under scrutiny. While some countries have set targets to achieve net-zero carbon emissions, many continue to fund new fossil fuel projects. The International Energy Association said in 2021 that no new fossil fuel projects would be possible if the world was to reach net-zero emissions by 2050.
The letters, signed by five independent human rights experts appointed and mandated by the UN Human Rights Council, are not legal judgments but can be cited in legal proceedings.
It is the first time the UN has taken action against the oil industry and its financial backers on the impact of climate change on human rights.
ClientEarth said it “sets a new legal standard for the human rights responsibilities of fossil fuel companies to address the climate crisis”.
“UN experts could not have said it more clearly: Banks have their own legal responsibility for the escalating harmful threat to human rights posed by climate change.”
Citi declined to comment. “We will consider any correspondence from the U.N. in due course,” Goldman said.
HSBC said it was “committed to being transparent about the opportunities, challenges and progress we face on environmental, social and governance issues”.
BNP Paribas and Saudi Aramco did not respond to requests for comment.
Additional reporting by Stephen Morris, Joshua Franklin, Stephen Gander and Summer Atrush.
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