THEO VAN GOGH “TOP OF THE AGENDA!”: Europe’s Biggest Bank to Stop Financing New Oil, Gas Fields

In an update to its climate policies, HSBC announced that it will no longer finance (Bloomberg) new oil and gas fields or related infrastructure. It will still finance existing fossil fuel projects and energy companies, though it said the companies it backs need to have plans consistent with its climate targets. Climate activists welcomed the move while urging HSBC to further clarify its financing policies and calling on other banks to make similar commitments.

HSBC is among the biggest funders of fossil fuel companies in the world, and its London headquarters has been the site of repeated protests by climate activists. In a report last year, the International Energy Agency said investments in new coal, oil, and gas extraction need to end immediately (AP) for the world to meet the Paris Agreement goal of limiting global warming to 1.5°C (2.7°F).   

Analysis

“Financial institutions writ large play a really, really important role in keeping afloat the fossil fuel economy that we have, but also they have a huge role and an opportunity to drive the shift towards a clean energy economy,” the Rainforest Action Network’s Aditi Sen tells the Associated Press.

“[HSBC’s] symbolic step to limit its direct exposure to the most polluting fossil fuels does not restrict its financing of energy companies with expansion plans, but it could place some pressure on competitors to follow suit,” the Financial Times’ Kenza Bryan and Emma Dunkley write.

For Foreign Affairs, Tufts University’s Kelly Sims Gallagher discusses the role of banks in reaching net-zero emissions goals.