HSBC, one of the world's largest lenders to energy companies, has declared that it will cease financing new oil and gas projects. The banking giant also announced its intent to request more comprehensive information from energy clients concerning their strategies to reduce carbon emissions.
Covering everything from biomass projects to hydrogen, nuclear and thermal coal, the policy was aimed at driving progress across regions with different energy systems, Celine Herweijer, HSBC's Chief Sustainability Officer, told Reuters. "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," Herweijer said. "The world cannot get to a net-zero energy future without energy companies being at the heart of the transition."
This decision, part of a broader update to its sector policy, received widespread acclaim from activist groups that have previously scrutinized HSBC's actions. The bank's commitment to not support oil and gas endeavors approved after 2021 aligns with the International Energy Agency's call for such measures to achieve global net-zero emissions by 2050. Other financial institutions, including Lloyds, have also made similar commitments.
HSBC clarified that it will persist in providing corporate-level financing to energy companies to aid their transition to cleaner energy sources and will evaluate their strategic plans on an annual basis. The policy covers a range of energy projects, encompassing biomass, hydrogen, nuclear, and thermal coal, with the objective of fostering progress in diverse energy systems globally.
To track the progress of oil and gas companies, the bank will now request additional information, including production projections beyond 2030.
Source: Lawrence and Jessop. Reuters. "HSBC to stop funding new oil and gas fields as part of policy overhaul". https://www.reuters.com/business/finance/hsbc-cut-funding-new-oil-gas-fields-2022-12-14/. 14/12/22. [Date accessed: 14/12/22]
Edited by: Adhitya Balachander.
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