HSBC halts new lending to oil and gas field projects

HSBC will no longer fund new oil and gas fields or related infrastructure, a move climate activists say puts them ahead of many peers in fighting global warming.

The London-based bank announced the move on Wednesday as part of an update to its energy policy that it said had been informed by “scientific and international bodies” and an analysis of pathways that will limit global temperature rise to 1.5C .

The new policy covers both loans and debt assumptions, the bank said.

HSBC is one of the largest financiers of fossil fuel companies, having run down $111 billion in debt since signing the Paris Climate Agreement in late 2015.

As a result, the company has been criticized by climate activists, with its Canary Wharf headquarters the target of frequent protests. It has also faced a shareholder vote on its support of the fossil fuel industry.

The new policy “shows the way for other banks,” particularly those that “claim to be leaders in climate action but continue to finance oil and gas companies,” said Lucie Pinson, director of environmental nonprofit Reclaim Finance.

While Pinson said HSBC should clarify if or when funding for oil and gas developers will be halted and that other banks should follow its lead and “stand strongly behind 1.5C”.

HSBC said it will continue to provide corporate finance and advisory services to energy sector clients, citing a report by the International Energy Agency that said financing and investment in existing oil and gas fields will remain necessary for an orderly net-zero transition.

These companies must have transition plans in place that are consistent with the bank’s funded 2030 emissions targets and its 2050 net-zero commitment.

HSBC also said if a company’s plans are not aligned with the bank’s goals and commitments, HSBC will not provide new funding and may even withdraw existing support. HSBC halts new lending to oil and gas field projects

Fry Electronics Team

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