Three non-government organizations (NGOs) are taking French bank BNP Paribas to court in Paris, according to a statement environmental activists from Les Amis de la Terre, Oxfam France, and Notre affaire à tous published on Thursday.

The NGOs accuse Europe's leading financial institution of climate crimes and of making a «significant contribution» to global warming. They have already issued an ultimatum calling on the institution to refrain from financing the fossil energy sector. A court summons was been issued to the bank today.

Ensnared by Due Diligence

In a response to the action, BNP Paribas said it regretted the NGOs had taken legal action instead engage in dialogue.

In their lawsuit, the NGOs are trying to hold the bank accountable by due diligence, which is a first. Since 2017, French law stipulates that large companies have to take effective measures to prevent human rights and environmental violations throughout their business dealings. This argument has already been used in France against energy company Total Energies, but never against a financial company. Until now.

Swiss Deadline Looming

This should make the board of directors at Swiss banks sit upright and take notice. According to an extension of the Swiss Code of Obligations (CO) introduced on January 1, 2022, in the wake of the corporate responsibility initiative, all Swiss companies above a certain size must submit a non-financial report by June of next year.

Business activities considered are environmental aspects, social affairs, and good management along with labor and human rights and the fight against corruption. The board of directors of the respective company has to sign off on the report and make it publicly available for ten years. If a company does not wish to commit to any of the standards, they have to be duly justified in the report.

Possible Criminal Liability

The expanded Code of Obligations will likely pave the way for climate and human rights organizations in Switzerland to demand this as well. Lawsuits such as the one filed against BNP Paribas can be expected as outlined under section 964a of the Swiss Code of Obligations on transparency about non-financial matters, companies also face criminal liability.