Along with no longer financing new oil and gas fields, HSBC said it will 'accelerate' activities in renewable energy
London (AFP) - Banking giant HSBC on Wednesday said it would end financing for new oil and gas fields, a decision welcomed by environmentalists who nevertheless urged greater action from banks and government.
In an annual update of its climate transition plans, the London-headquartered bank said it “will no longer provide new lending or capital markets finance for the specific purpose of projects pertaining to new oil and gas fields and related infrastructure”.
HSBC added in a statement that it was “committed to supporting and financing the transition to a secure net zero future”.
Responding, Greenpeace UK’s senior climate campaigner Charlie Kronick called the announcement “long overdue”.
He added in a statement: “Banks have been funding climate chaos to the tune of billions of pounds. Now one of the UK’s biggest banks has realised that there’s no place for new oil and gas in a world that is trying to tackle the climate crisis.”
Kronick called the announcement “an embarrassment for the UK government”, which is “pressing on with new oil and gas licences” as it looks to beef up energy security following the invasion of Ukraine by major fossil fuel producer Russia.
HSBC meanwhile said it would continue to provide finance and advisory services to energy sector clients at the corporate level, as long as their plans were in line with the bank’s targets to cut emissions.
- ‘Strong signal’ -
“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,” said Jeanne Martin, head of banking programme at ShareAction.
“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.”
Martin meanwhile stressed that “HSBC’s announcement only applies to asset financing, and doesn’t deal with the much larger proportion of finance it still provides to companies that have oil and gas expansion plans”.
Citing the International Energy Agency, the bank said “an orderly transition requires continued financing and investment in existing oil and gas fields to maintain the necessary output”.
HSBC “will therefore continue to provide finance to maintain supplies of oil and gas in line with current and future declining global oil and gas demand”.
The bank on Wednesday added it would “accelerate” activities in renewable energy and clean infrastructure following a previous announcement to provide between $750 billion and $1 trillion in sustainable finance and investment by 2030.
A year ago, the lender published a plan to stop financing thermal coal activities.