HSBC confirms plans to stop funding new oil and gas fields
HSBC has revealed it will stop funding new oil and gas fields, as part of a wider update of its environmental policies.
The banking giant will also push energy clients to provide more information over their plans to cut carbon emissions – such as production levels beyond 2030.
It is not the first bank operating in the UK to exit from oil and gas projects, as Lloyds Bank has also committed to not financially supporting new developments.
This follows calls last year from the International Energy Agency for no new fossil fuel projects to ensure the world reaches net zero carbon emissions over the next three decades.
In its report, Net Zero by 2050, said: “Climate pledges by governments to date – even if fully achieved – would fall well short of what is required to bring global energy-related carbon dioxide (CO2) emissions to net zero by 2050 and give the world an even chance of limiting the global temperature rise to 1.5 °C.”
HSBC explained it would continue to finance energy companies at the corporate level, to help them overhaul their businesses and drive development of cleaner energy sources.
Celine Herweijer, HSBC’s Chief Sustainability Officer, told news agency Reuters the policy was aimed at driving progress across regions with different energy systems – including hydrogen, nuclear and thermal coal.
The bank would also continue to support existing oil and gas fields, with supplies falling over time with demand, a “pragmatic” move amid a Russian squeeze on gas supplies.
Herweijer said: “It’s not no new fossil fuel investment as of tomorrow. The existing fossil fuel energy system needs to exist hand-in-hand with the growing clean energy system.
“The world cannot get to a net-zero energy future without energy companies being at the heart of the transition.”
Industry body Offshore Energies UK was concerned the decision would undermine the country’s energy security.
It noted that the Government had included oil and gas exploration in its energy security strategy and that domestic fossil fuel production would remain essential to meeting the UK’s consumption needs.
Francesca Bell, OEUK’s senior investor relations advisor, said: “The key point is that delivering UK energy is expensive – providing energy now and building the low carbon systems of the future will cost billions of pounds a year. That means support from the government and ongoing commitment from banks is essential. We want them to work with us, not against us.
“If financial institutions withdraw support, then the UK’s energy security will be undermined, and the government will struggle to deliver a homegrown transition to cleaner energies.”