HSBC to stop funding for all new oil and gas projects

The bank has faced considerable criticism for its role in funding new oil and gas while also maintaining green pledges.  

HSBC has announced it will no longer fund new oil and gas projects to limit its contributions to greenhouse gas emissions as part of a drive for net-zero.  

This move does not prohibit the largest bank in Europe from funding energy companies with plans for fossil fuel projects, but it’s hoped it could put pressure on other banks to follow.  

HSBC originally committed to net-zero in 2020 and invested $1 trillion in clean energy infrastructure. But it has continued to face backlash from shareholders and environmentalists, as £8.7bn of funds went towards new oil and gas last year.  

Jeanne Martin, Head of the Banking Programme at responsible investment charity ShareAction, urged other major banks, like Barclays and BNP Paribas, to follow HSBC’s lead. 

She 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. 

‘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.’ 

Martin added that ShareAction expected to hear how HSBC plans to address finances for energy companies with oil and gas plans as soon as possible.  

The decision comes soon after Lloyd’s bank announced its own commitment in October to no longer fund new oil and gas projects directly.  

Scientists are clear that fossil fuels must be phased out, as the International Energy Agency (IEA) says no more new fossil fuel projects can go ahead if net-zero targets are to be met by 2050.  

However, the UK government is planning to award up to 130 licences for oil and gas exploration in the North Sea despite repeated warnings. Environmental groups are planning to challenge this in court.  

Photo by Joshua Lawrence