HSBC has announced it will halt finance for new oil and gas fields (Tim Ireland/PA)
(Picture: PA Wire)GREEN campaigners targeting big banks won a victory today, when HSBC said it will no longer lend cash or provide other finance to new oil and gas fields.
While ShareAction, that led the shareholder resolution on getting the bank to change stance was delighted, it says there is more to do.
Jeanne Martin, Head of Banking Programme at ShareAction, 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. It sets a new minimum level of ambition for all banks committed to net zero.
“We urge major banks like Barclays and BNP Paribas to follow suit.”
But the move only applies to asset financing, and doesn’t deal with the much larger proportion of finance the bank still provides to companies that have oil and gas expansion plans.
Martin added: “We expect to see HSBC come forward with new proposals that will address this as soon as possible.”
The bank said it will continue funding natural gas projects for now, given the global energy crisis and the pressures placed on supply by the war in Ukraine.
HSBC has said it seeks to align its financed emissions to net zero by 2050 or sooner in line with the goals of the Paris Agreement on climate change, meaning it will help clients reduce their use of fossil fuels and reduce funding to the sector.
These moves could boost HSBC shares, since they could catch the eye of environmentally friendly investors. The shares today slipped 1p to 499p, but are up over the year.
Last year Barclays pledged to increase its financing of sustainable businesses to $1 trillion by 2030 as part of the shift to a low-carbon economy.
Martin added: ““The public and investors expect the banking sector to play its part in tackling climate change. If the bank’s executives don’t step up, they can expect concerned shareholders to force them to act.”
Banks and other large companies have been accused of “greenwashing” – claiming credit for environment moves, without truly believing in climate change.
In October the advertising watchdog banned a series of HSBC adds taking credit for climate change initiatives. The Advertising Standards Authority said: “Despite the initiatives highlighted in the ads … HSBC was continuing to significantly finance investments in businesses and industries that emitted notable levels of carbon dioxide and other greenhouse gasses. We did not consider consumers would know that was the case.”
In July, Stuart Kirk resigned as HSBC’s head of responsible investment following a speech in which he claimed climate change was overstated and that policymakers were using scare tactics. A huge backlash followed.
HSBC’s last annual report show that its loans to clients were linked to the released of 65 million of tonnes of carbon dioxide a year.
The bank said today: “Together with our previously announced 2030 targets, the policy is an important mechanism for reducing the financed emissions of our portfolio of energy clients and helping to deliver decarbonisation.
The policy also emphasises our commitment to supporting clients who are taking an active role in the transition. We’ll engage closely with them on their transition plans, helping to finance and invest in the technologies and infrastructure needed to succeed in the transition.”
