HSBC to stop funding new oil and gas fields

Barry White

HSBC has announced it will cut direct financing and advisory ties to new oil and gas fields and metallurgical coal projects, after coming under fierce criticism over its climate change policies from shareholders and environmental activists despite its green pledges.

The Financial Times 14 December reports: “The symbolic step to limit its direct exposure to the most polluting fossil fuels does not restrict its financing of energy companies with expansion plans, but it could place some pressure on competitors to follow suit. Banks globally have been targeted for being slow to stop financing the oil and gas industry expansion. Lenders have argued they need to phase out financing as fossil fuel companies take their own action to cut emissions, rather than axe it entirely, to allow for a transition to net zero by 2050. This argument has gained traction during the energy crisis, as countries rush to supplement lost gas supplies from Russia as a result of the war on Ukraine.”

Tony Burdon, chief executive at climate finance campaign Make My Money Matter , said: “it’s another nail in the coffin for fossil fuel expansion, and a massive signal to other UK banks that the game is up on new oil and gas.”

Jeanne Martin, head of the banking programme at ShareAction, a charity that campaigns for reducing investment for fossil fuels like oil and gas, said: “HSBC’s announcement sends a strong signal to fossil fuel giants and governments that banks’ appetite for financing new oil and gas fields is diminishing.”

The charity called on other banks to follow suit – saying this move sets a “a new minimum level of ambition” for the sector see:

The BBC news web site reports that: “In 2020, HSBC made a pledge to be “net zero” – which means not adding to greenhouse gases already in the atmosphere – and investing and loaning up to $1 trillion (£806bn) in green projects.

“However, the bank came under criticism earlier this year when it was revealed it had invested an estimated $8.7bn (£6.4bn) into new oil and gas in 2021” see:

Under the 2015 Paris Agreement, 197 countries agreed to try to keep temperature rises “well below” 1.5C to avoid the worst impacts of climate change. Experts say that to achieve this, net zero must be reached by 2050.

Photo: Mick Holder NUJ.

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