HSBC rules out financing new coal power and tar sands

HSBC, one of the world’s largest financial institutions, has made new commitments to stop financing the most carbon intensive energy projects.

The bank released an updated energy policy statement this week that explicitly rules out funding new coal-fired power stations around the world, except for three countries: Bangladesh, Indonesia and Vietnam.

In these countries, funding will be provided in exceptional cases, and only until 2023, “if no reasonable energy alternative can be found”.

The bank has already made a commitment, in force since 2011, to stop financing coal in the developed world, which has extended to 78 countries. This forms part of its overall plan to shift its resources towards sustainable investments for the long-term.

Daniel Klier, Global Head of Sustainable Finance at HSBC, said: “Our updated energy policy reflects HSBC’s ambition to help our customers make the transition to a low-carbon economy in a responsible and sustainable way.

“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 2 degrees Celsius and our responsibility to support the communities in which we operate.”

The new policy also stops financing to new offshore oil and gas projects in the Arctic and restricts oil sands support to customers “which are diversified, with appropriate plans to transition to a low-carbon economy, and we will not support new greenfield projects”.

This has been taken by some environmentalists to mean a ban on funding the controversial Keystone XL pipeline between Canada and the United States. The planned project, stretching 1,179 miles from the oil sands in Alberta to Nebraska could carry 830,000 barrels of oil each day.

Commenting on HSBC’s announcement, John Sauven, Executive Director of Greenpeace UK, said: "This latest vote of no-confidence from a major financial institution shows that tar sands are becoming an increasingly toxic business proposition. It makes no sense to expand production of one of the most polluting fossil fuels if we are serious about dealing with climate change in a post-Paris world. HSBC has got the message.”

 

Photo Credit: Nick Garrod/Flickr