(PresidentialHill.com)- In its “net-zero” efforts to drive down global greenhouse gas emissions, multinational investment bank HSBC announced last week that it will no longer finance new oil and gas projects.
Europe’s largest bank said its decision came after receiving advice from “leading scientific and international bodies.”
HSBC was previously criticized for funding oil and gas projects despite making green energy pledges.
In 2020, HSBC pledged to be “net zero,” proposing to invest and loan up to $1 trillion in green projects.
But earlier this year, the bank came under criticism after ShareAction, a charity campaigning to reduce investments in fossil fuels, reported that HSBC invested approximately $8.7 billion in new oil and gas during 2021 despite making the net-zero pledge.
HSBC’s move was praised by environment activists eager to force institutions to adopt ESG-inspired pledges to abandon fossil fuels.
Jeanne Martin, the head of the banking program for ShareAction, said HSBC’s announcement “sends a strong signal to fossil fuel giants” that the financial industry’s “appetite for financing new oil and gas fields is diminishing.”
ShareAction has called on other banks to follow HSBC’s lead, arguing that HSBC’s decision will set a “new minimum level of ambition” for the entire banking sector.
In its updated energy policy, HSBC said the decision to no longer finance new oil and gas projects was made following “consultation with leading scientific and international bodies” that estimated that, under a net-zero scenario, current oil and gas fields would meet any demand in 2050.
HSBC’s decision follows Lloyds Bank, the UK’s largest domestic bank, which announced a similar decision in October.
HSBC confirmed that it will continue to maintain its current investments in oil and gas fields, explaining that “fossil fuels, especially natural gas, have a role to play in the transition” to net-zero, “even though that role will continue to diminish.”