HSBC Updates Energy Policy to Support Net-Zero Transition

In a statement on its website, London headquartered HSBC, which sees Asia at the heart of its strategy, says it will no longer finance new oil and gas fields.

The bank said its updated energy policy has been developed in consultation with scientific and international bodies, and industry, and is informed by analysis of a range of pathways that, if followed, would help limit the global temperature rise to 1.5°C.

The policy is an important mechanism for reducing the financed emissions of HSBC’s portfolio of energy clients and helping to deliver decarbonisation.

The policy also emphasises the institution’s commitment to supporting clients who are taking an active role in the transition. “We’ll engage closely with them on their transition plans, helping to finance and invest in the technologies and infrastructure needed to succeed in the transition,” the statement said.

HSBC said it plans to accelerate activities in renewable energy and clean infrastructure, aligned with its previously announced ambition to provide US$750 billion to US$1 trillion in sustainable finance and investment by 2030.

Thermal Coal Phase-Out

The updated policy covers the broader energy system, including upstream oil and gas, oil and gas power generation, coal, hydrogen, renewables and hydropower, nuclear, biomass and waste-to-energy sectors.

It seeks to balance three objectives: driving down global greenhouse gas emissions, the need to enable an orderly transition that builds resilience in the longer term, and the need to support a just and affordable transition.

In line with the policy, HSBC said it will no longer provide new lending or capital markets finance for the specific purpose of projects pertaining to new oil and gas fields and related infrastructure when the primary use is in conjunction with new fields.

“We will continue to provide finance or advisory services to energy sector clients at the corporate level, where clients’ transition plans are consistent with our 2030 portfolio-level targets and net zero by 2050 commitment,” the bank said in its statement.

In addition to the updated energy policy, HSBC also updated its thermal coal phase-out policy to include targets to reduce absolute on-balance sheet financed emissions from thermal coal mining by 70% by 2030, and 70% for thermal coal-fired power production. The updated thermal coal phase-out policy also prohibits finance for new metallurgical coal mines.

#NetZero #ThermalCoal #HSBC