Investor pressure prompts HSBC to stop backing oil and gas exploration
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
Banking giant HSBC has said it will no longer finance new oil and gas fields. The decision follows a shareholder resolution from March this year by campaign group ShareAction, which was backed by Brunel Pension Partnership, Merseyside Pension Fund and Islington Pension Fund among others.
On Wednesday, the bank said that it will cease financing oil and gas exploration. Many or most pension funds do not yet have a policy to push for a stop to new exploration; last month, campaigners Make My Money Matter said of the 20 top defined contribution schemes, none has a policy to end fossil fuel expansion.
The news comes on the back of a shareholder resolution filed in March, when HSBC already agreed to phase down financing of fossil fuels in line with limiting global temperature rise to 1.5 degrees Celsius, as well as to update the scope of its oil, gas and thermal coal policies by the end of 2022, and pledged to update the scope of its fossil fuel targets to cover capital markets activities by Q4 2022.
Eleven institutional investors filed the March resolution: ACTIAM, AkademikerPension, La Banque Postale Asset Management, Brunel Pension Partnership, Candriam, Folksam, Friends Provident Foundation, Islington Pension Fund, Man Group, Merseyside Pension Fund and Trinity College Cambridge.
A spokesperson for HSBC said: “Our aim is to reduce emissions in line with a 1.5 degree pathway, promote energy security, and ensure energy affordability and access. 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.”
A spokesperson for HSBC said: “Our aim is to reduce emissions in line with a 1.5 degree pathway, promote energy security, and ensure energy affordability and access. 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.”
Jeanne Martin, who heads up the banking programme at ShareAction, said: “HSBC’s announcement sends a strong signal to fossil fuel giants and governments that banks’ appetite for financing new oil and gas fields is diminishing. It sets a new minimum level of ambition for all banks committed to net zero.”
Martin added: “We urge major banks like Barclays and BNP Paribas to follow suit.”
She criticised however that HSBC’s announcement only applies to asset financing, omitting what she said is a much larger proportion of finance it still provides to companies that have oil and gas expansion plans.
“We expect to see HSBC come forward with new proposals that will address this as soon as possible,” Martin said.
She criticised however that HSBC’s announcement only applies to asset financing, omitting what she said is a much larger proportion of finance it still provides to companies that have oil and gas expansion plans.
“We expect to see HSBC come forward with new proposals that will address this as soon as possible,” Martin said.
Should more pension funds call for a halt to fossil fuel exploration?
