As part of a broader change to its sector policy, HSBC announced on Wednesday that it will stop funding new oil and gas projects and will demand more information from its energy clients regarding their efforts to reduce carbon emissions.
The majority of activist groups that have criticized HSBC in previous years applauded the decision by one of the largest lenders to the energy sector as a long-awaited upgrade that will push businesses toward a greener future.
The biggest bank in Europe claimed that it decided after consulting with international energy experts.
It follows earlier criticism of HSBC for supporting oil and gas projects despite its commitment to environmental sustainability.
The International Energy Agency has stated that this action is necessary for the world to achieve net-zero emissions by the year 2050. HSBC is one of the largest banks to confirm it would not sponsor oil and gas projects that gained final permission after the end of 2021. The International Energy Agency has stated that this action is necessary for the world to achieve net-zero emissions by the year 2050. HSBC is one of the largest banks to confirm it would not sponsor oil and gas projects that gained final permission after the end of 2021.
ShareAction, an organization that promotes ethical investing, has Jeanne Martin as its Head of the Banking Program, who said:
“HSBC’s announcement sends a clear message to governments and major producers of fossil fuels that banks’ interest for funding new oil and gas developments is waning. It establishes a new standard of minimum aspiration for all institutions devoted to net zero.
“We urge other large banks to follow suit, including Barclays and BNP Paribas.
“However, HSBC’s announcement only pertains to asset financing and ignores the significantly greater share of finance it continues to offer to businesses with ambitions for oil and gas expansion. We anticipate additional ideas from HSBC to solve this issue as soon as possible.
ShareAction is pushing HSBC and other financial institutions to phase out fossil fuels, develop solid action plans to reach net zero, and boost investment in low-carbon substitutes.
ShareAction has been talking with HSBC about the details of its new energy strategy for the past six months. These fruitful interactions helped HSBC make commitments such as not financing new oil and gas fields and metallurgical coal mines, imposing strict guidelines for new clients regarding oil and gas exploration, and setting an absolute target of a 70% reduction in emissions from thermal coal on the balance sheet by 2030, among other things. However, the bank’s new energy policy needs to be improved in other areas.