Europe's largest bank announces ban on unsustainable energy investments
23 April 2018
London-based HSBC, whose global assets total more than $2 trillion, announced on April 20 that it will no longer finance new coal-fired power plants (with a few targeted exceptions), Arctic drilling or new oilsands projects, including pipelines.
HSBC HQ, London - Image: Wikimedia Commons
The announcement comes as part of a strengthened energy policy that aims to help customers transition to a low-carbon economy in a sustainable way, while "closing relationships with those who do not meet minimum standards."
"We recognise the need to reduce emissions rapidly to achieve the target set in the 2015 Paris Agreement to limit global temperature rises to well below two degrees Celsius, and our responsibility to support the communities in which we operate," said Daniel Klier, HSBC's global head of sustainable finance, in a press statement.
HSBC's policy update comes with a long list of "prohibited business," which includes new offshore oil and gas projects in the Arctic, new greenfield oilsands projects, new large dams for hydroelectric projects that are inconsistent with the World Commission on Dams Framework, and new nuclear projects that are inconsistent with International Atomic Energy Agency standards.
The multinational bank confirmed that its ban on new greenfield oilsands projects includes new pipelines, and said that in the case of new coal-fired power plants, its only exceptions will be for Bangladesh, Indonesia and Vietnam, in order to "appropriately balance local humanitarian needs with the need to transition to a low carbon economy."
HSBC plans to phase out its lending for the development of new coal-fired power plants in high-income countries by December 31, 2019, and anticipates that its other commitments to the oilsands sector will reduce over time.
In recent years the fossil fuel sector has lost a number of major investors, including France's BNP Paribas, the World Bank, insurance giant AXA, ING, and Sweden’s largest pension fund, AP7, among others.