Europe’s largest bank to stop funding new oil and gas fields

HSBC, Europe’s largest bank, updated its energy policy Wednesday to stop providing financing for new oil and gas fields. The policy change is part of the company’s transition toward its net zero by 2050 commitment.

HSBC’s announcement states:

“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.”

U.S. banks should follow suit. According to the most recent Banking on Climate Chaos report, “U.S. banks continue to be the single worst grouping of fossil banks…” 

Bank financing is essential for new dangerous fossil fuel projects to be started and developed. That’s why stopping such funding is crucial for preventing climate pollution emitted from new fossil fuel facilities. 

In addition to threatening our planet and public health, climate change puts people’s finances at risk, too.

For example, banks that continue to finance fossil projects may suffer significant losses as the world moves away from carbon energy and the value of those projects plummets.

The Intergovernmental Panel on Climate Change (IPCC)’s report in April 2022 projected up to $4 trillion in stranded fossil fuel assets as the world works to address climate change. Which means continued financing of fossil fuel projects is bad for bank profitability and shareholder value, putting people’s retirements and other savings at risk.