As part of a policy to support and finance a net-zero transition, HSBC will stop funding new oil and gas field developments and related infrastructure, the banking giant said on Wednesday.
In an update on its energy policy, the bank said, “We 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 when the primary use is in conjunction with new fields.”
At the same time, HSBC plans to accelerate activities and financing clean energy projects.
“Given the parallel urgency of today’s global energy crisis, we plan to accelerate our activities in renewable energy and clean infrastructure, aligned with our previously announced ambition to provide $750 billion to $1 trillion in sustainable finance and investment by 2030,” said the bank, which is one of the world’s few to have now pledged not to provide financing for new oil and gas fields.
As early as in 2021, some of the largest institutional shareholders of HSBC urged Europe’s biggest bank to announce a strategy to reduce its exposure to lending money to fossil fuel development.
Still, HSBC will continue to provide finance or advisory services to energy sector clients at the corporate level, where clients’ transition plans are consistent with the bank’s 2030 portfolio-level targets and net-zero by 2050 commitment, the bank said.
Earlier this year, a report by environmental groups showed that the 60 largest banks in the world poured as much as $742 billion in fossil fuel financing in 2021 alone. Overall, fossil fuel financing remained dominated by four U.S. banks, as JPMorgan Chase, Citi, Wells Fargo, and Bank of America together accounted for one-quarter of all fossil fuel financing over the last six years, according to the annual Banking on Climate Chaos report from a number of environmental organizations.
