HSBC the Latest Bank to Announce End to Fossil Fuel Investments
Global banking giant HSBC has announced it would no longer fund fossil fuel projects, including Arctic drilling, tar sands development, the construction of new coal plants, and hydroelectric projects that are not consistent with guidelines set by the World Commission on Dams.
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“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,” said Daniel Klier, Group Head of Strategy and Global Head of Sustainable Finance, HSBC in a public statement. “We recognize the need to reduce emissions rapidly to achieve the target set in the 2015 Paris Agreement to limit global temperatures rises to well below 2°C and our responsibility to support the communities in which we operate.”
Despite the public stances on fossil fuels taken by financial titans such as ING, BNP Paribas and BlackRock Investments, many financial institutions are still resisting the growing calls to extract themselves from carbon-intensive investments. Those banks are not considering the significant risks of stranded assets, as in coal or oil deposits left in the ground due to decreased demand. Banks are also exposing themselves to more risk, due to the increased pace of regulation from governments that see the need to take on climate change.
HSBC first announced it would “restrict its support” for coal-fired power plants in 2011. Now it has halted the finance of them altogether – with the exception of projects in Bangladesh, Vietnam and Indonesia. The exception, HSBC explained, is necessary “in order to appropriately balance local humanitarian needs with the need to transition to a low-carbon economy.”