In a move to divest from fossil fuel, HSBC, Europe’s biggest bank, announced it would no longer fund oil or gas projects in the Arctic, tar sands projects as well as many coal projects. The news was heralded by many climate campaigners as “incredible” and is a signal that “the era of fossil fuels is coming to a close.”
While banks continues to funnel money – $115 billion – into tar sands, offshore oil drilling, and coal mining projects, HSBC was once ranked as the “seventh worst in the world for the financing of ‘extreme fossil fuels,'” Common Dreams reported.
In an updated energy policy, HSBC outlined the changes it’s making to its financial services:
- New coal-fired power plant projects, subject to very targeted exceptions of Bangladesh, Indonesia and Vietnam in order to appropriately balance local humanitarian needs with the need to transition to a low carbon economy. Consideration of any such exception is subject to: (i) independent analysis confirming the country has no reasonable alternative to coal; (ii) the plant’s carbon intensity being lower than 810g CO2/kWh; and (iii) financial close on the project being achieved by 31 December 2023
- b) New offshore oil or gas projects in the Arctic
- c) New greenfield oil sands projects
- d) New large dams for hydro-electric projects inconsistent with the World Commission on Dams Framework
- e) New nuclear projects inconsistent with the International Atomic Energy Agency (IAEA) standards (from Common Dreams)
HSBC is among other banks, such as BNP Paribas, to take such critical action against climate change.
Many climate campaigners believe the bank’s actions are sending a clear message to the current U.S. administration that there is no future in fossil fuel in hopes this will shift the world toward renewable energy.
“Financial institutions around the world are seeing the reputational and material risks these pipelines pose in a post-Paris world where respecting Indigenous rights and the need to transition off of fossil fuels is smart business and not just good public relations,” Keith Stewart, senior energy strategist at Greenpeace Canada, said.
“As the impacts of climate change become increasingly apparent,” according to a report, entitled “Banking on Climate Change,” many say the institutions must go further to combat climate change.
“Institutions should no longer continue financing any fossil fuel projects when cheaper, cleaner, more reliable energy solutions like wind and solar are readily available,” Kelly Martin, director of Sierra Club’s Beyond Dirty Fuels Campaign, said.