HSBC announced that it will stop financing new coal projects in all but three countries worldwide, as well as new offshore oil and gas drilling in the Arctic and tar sand projects.
HSBC, Europe’s largest bank and one of the biggest financial players in the world, announced on Friday that it will no longer finance some of the most carbon intensive energy projects. This includes new coal-fired power projects in all countries around the world apart from Bangladesh, Indonesia and Vietnam, as well as Arctic oil and gas drilling and tar sands.
“We recognise the need to reduce emissions rapidly to achieve the target set in the 2015 Paris Agreement to limit temperatures rises to well below 2 degrees Celsius and our responsibility to support the communities in which we operate,” said Daniel Klier, group head of strategy and global head of sustainable finance at HSBC.
To this end, the banking giant will also stop financing new large dams for hydro-electric projects inconsistent with the World Commission on Dams Framework, as well as new nuclear projects inconsistent with the International Atomic Energy Agency (IAEA) standards.
“Our updated energy policy reflects HSBC’s ambition to help our customers make the transition to a low-carbon economy in a responsible and sustainable way,” added Klier.
In 2011, HSBC decided to restrict its support for new coal-fired plants and all but ceased financing them in 78 developed countries. Extending this to nearly all countries worldwide is part of the bank’s plan to shift its resources towards sustainable investments in the long term. The “targeted and time-limited exception” for Bangladesh, Indonesia and Vietnam is meant to ensure that local humanitarian needs are met during the transition to a low-carbon economy.
HSBC’s announcement was welcomed by environmental groups.
“This latest vote of no-confidence from a major financial institution shows that tar sands are becoming an increasingly toxic business proposition,” John Sauven, executive director of Greenpeace UK, said in a statement.
“It makes no sense to expand production of one of the most polluting fossil fuels if we are serious about dealing with climate change in a post-Paris world. HSBC has got the message.”
Image credit: Chris Beckett via Flickr