It was brilliant to see HSBC’s landmark announcement yesterday that it will no longer finance new oil and gas fields.
As the UK’s largest high street bank and one of the world’s biggest financers of fossil fuels, this is a hugely significant move. HSBC’s pledge sends a strong signal that European banks are losing their appetite for new oil and gas fields.
It sets a new minimum level of ambition for all banks committed to net-zero. We will keep the pressure on other banks like Barclays in the UK and BNP Paribas in France – as the second and third largest European funders of oil and gas expanders - to follow suit with their own commitments.
Yesterday’s announcement also shows the power of shareholders to drive positive change. ShareAction worked with a group of investors earlier this year to table a resolution pressing the bank to update its energy policy. Over the last six months, ShareAction has been engaging with HSBC on the contents of this new energy policy.
Banks have a vital role to play to finance our economic transition to net-zero – now
ShareAction has been pushing for banks to decarbonise in line with their own net zero commitments, to meet the goals of the Paris Agreement and help prevent the worst impacts of climate change.
We have been calling for HSBC and other banks to phase out fossil fuels, create credible action plans for the path to net zero and increase investment in low-carbon alternatives.
Decisions like this matter. The financing choices made by banks today will influence the world we live in tomorrow.
The stakes could not be higher. The climate crisis is already wreaking havoc across the world. This year nearly 2,000 people in Pakistan died after extreme floods left a third of the country underwater. In the UK, 2,800 pensioners died before their time as a result of this summer’s heatwaves, according to Department of Health figures.
If we are to stand even a 50 per cent chance of making our economies net zero by 2050, then there is no room for new oil and gas fields, according to The International Energy Agency. Yet the banking sector is not yet doing enough to avert the worst consequences of climate change, protect people and our natural world.
Still room for improvement
As is often the case, the devil is in the detail.
The bank has only pledged to end one type of financing. It doesn’t deal with the much larger proportion of finance it still provides to companies that have oil and gas expansion plans.
HSBC now needs to address its continued funding of companies that build and run massive oil and gas operations - who show no sign of stopping any time soon – including the likes of Exxon Mobil and Saudi Aramco.
Our research reveals that HSBC is by far the worst UK offender when financing energy companies with oil and gas expansion projects, followed by Barclays and BNP Paribas.
What needs to happen next
Every European bank, including HSBC, needs to do improve their climate policies. Our new banking report ‘In Debt to the Planet’ found that while almost all of them have taken steps to reduce their emissions, they are still finding ways to fund climate-harming companies and activities.
ShareAction has written to the CEOs of each of the banks with tailored recommendations about how they can close loopholes in their climate and biodiversity strategies. We are asking them to publish plans within the year setting out how they will stop bankrolling new oil and gas.
In the meantime, we'll continue working with investors and the public to hold banks to account. We can make this happen in a number of ways, from scrutinising their policies and asking difficult questions at Annual General Meetings, to submitting binding resolutions for change.
Every one of us can help keep the pressure on banks. To stay up to date on how you can get involved, sign up for our emails here.
Together we can ensure that banks are doing their bit to drive the positive change we urgently need.