Banking giant HSBC to end new oil and gas financing
Jeremy Beaman
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HSBC will no longer finance new oil and gas ventures because of climate change, the British multinational banking giant announced, marking a significant departure from other global financial firms who have held off on such a dramatic move.
HSBC put out an updated energy finance policy Wednesday, which it said was designed to serve its objectives of driving down global greenhouse gas emissions, as well as enabling an “orderly,” just, and affordable transition to green energy.
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“In line with the policy, 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,” the policy said.
It’s big news in global finance and represents a more aggressive approach to green finance than some of HSBC’s competitors, including members of the “big six” Wall Street banks, have embraced.
Big banks and fund managers have been under immense pressure from governments and environmental activists to quickly phase down and out their financing of fossil fuels in service of climate change mitigation.
Prominent firms such as JPMorgan Chase and BlackRock have committed to prioritizing green energy, yet they’ve also continued financing oil and gas projects, arguing that ending new investment would upend the global economy.
Imposing a policy against financing new oil and gas projects would be the “road to hell for America,” JPMorgan Chase CEO Jamie Dimon told Congress earlier this year.
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Sierra Club, one of the green groups that has pressed big financial firms to be more aggressive against oil and gas, praised HSBC’s announcement.
“This announcement from HSBC sends a strong signal that there is no future for fossil fuel expansion in a 1.5C-aligned world,” said Adele Shraiman with the Sierra Club’s Fossil-Free Finance campaign, referencing the global warming target set out under the Paris climate agreement.