Banking Giant Vows To Quit Funding New Oil And Gas Projects

(Photo by DANIEL LEAL/AFP via Getty Images)

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Jack McEvoy Energy & Environment Reporter
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The world’s eighth-largest bank HSBC said Wednesday that it would stop giving loans to fund new oil and gas fields in an attempt to help cut global carbon emissions.

HSBC will no longer finance fossil fuel fields that were approved in late 2021 as part of a broader plan to promote renewable energy and phase out oil and gas investing, according to a company news release. The banking giant said it will still fund oil and gas firms at the corporate level and will push them to fund green energy initiatives such as hydrogen and nuclear energy. (RELATED: Vanguard Leaves Climate Alliance After Republican Officials Call For Government Inquiry)

“Our aim is to reduce emissions in line with a 1.5 degree pathway, promote energy security, and ensure energy affordability and access,” HSBC spokesperson told the Daily Caller News Foundation in a statement.

Herweijer said that the bank’s decision was “pragmatic” as energy prices have spiked following Russia’s invasion of Ukraine. The International Energy Agency has previously called for financial institutions to not fund new oil and gas developments so that the world can produce “net zero” greenhouse gas emissions by 2050, according to a May 2021 report.

“We are working with our energy clients to support them to implement their transition plans and finance the transformation of the energy sector towards a clean and secure future,” the spokesperson said.

This picture taken on November 4, 2016 shows the illuminated HSBC logo at night on the facade of the HSBC headquarters building in Hong Kong. (Photo by ANTHONY WALLACE/AFP via Getty Images)

However, HSBC did not promise to stop providing other kinds of financial services for oil and gas companies, such as giving advice on acquisitions or mergers, according to The Wall Street Journal. Herweijer also told Reuters that HSBC would fund existing fossil fuel exploration as the bank believes that some oil and gas production must be maintained while green energy becomes more widely available.

In April 2021, HSBC joined the global Net Zero Banking Alliance, a group of large banks that pledges to wield its investments to get the world to meet international climate targets. The alliance holds $73 trillion in total assets, which is equal to 40% of international banking assets, according to the United Nations.

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