Thanks to pressure from thousands of people, UK banking giant HSBC is going to stop lending money to new fossil fuel fields, anywhere in the world. That means that any fossil fuel company that wants to drill for new oil, or dig for new gas, will not get a loan for it from HSBC. HSBC is the biggest bank so far to create a climate policy that restricts oil and gas funding.

Why does this matter?

This is a really big deal for a few reasons:

  • HSBC lends billions of dollars to the world’s biggest fossil fuel companies. This new announcement won’t stop all of that money, but it’s the first huge step in getting HSBC to wind down the cash they’re dishing out to fossil fuel companies.
  • HSBC is the first in the pack of major global banks to take this step. That means all the other major banks can see that it’s possible to stop funding new fossil fuel fields if they decide to. Now that HSBC is doing it, there’s no excuse for the likes of Barclays, Citi and RBC.
  • Fossil fuel execs will be quaking in their weird crocodile-skin boots. Because once one bank starts taking away the pocket money they need to dig for new fossil fuels, other banks might just follow. And that would put them in a real pickle.
  • And most importantly, it shows that we’re winning. It shows that pressure is working. It shows that together we can drag the world’s biggest businesses, kicking and screaming, to do the right thing. The job isn’t done. But now we know we have the tools to do it.

How did this happen?

How long have you got? Put simply, too many of us told HSBC that they can’t continue funding fossil fuels, and this announcement is a major sign that it’s working. Thousands of us on the outside (think activists, journalists, ordinary people) and inside (think staff & shareholders) made sure we were around every corner HSBC tried to walk down.

For example, *takes big breath*, the movement got HSBC found guilty of greenwashing by the UK ads regulator for misleadingly green adverts. Exposed them in the press for sending “sustainable” money to oil and gas. Pressured them to stop funding Putin’s fossil fuels in Russia when the war started. Set up a meeting for HSBC to meet the land defenders fighting against fracking projects funded by HSBC. Secretly surveyed tonnes of HSBC staff on HSBC’s fossil fuel funding, then released the anonymous results. Disrupted their AGM with non-stop singing. Got their shareholders to demand (and win!) climate action from HSBC. Hung out outside HSBC HQ to let staff know about HSBC’s fossil fuel funding.

Oh, and got their Head of Responsible Investment fired for saying “Who cares if Miami is 6ft underwater”.



Plenty of room for improvement on oil and gas

This HSBC’s announcement is just the start. It’s not perfect by any means. The policy rules out funding for new oil and gas fields. It doesn’t rule out money for oil and gas companies. So if Saudi Aramco (the world’s worst fossil fuel company and HSBC’s BFF) wanted to spend $10 billion exploring for new oil, they now shouldn’t be able to get the money from HSBC. However if Saudi Aramco asked for $10 billion to help them grow their business, HSBC can loan it to them.

Essentially, HSBC is failing to rule out loans to oil and gas companies, at a corporate level, that are still exploring and extracting new oil and gas. This goes completely against the science. The IEA (a group of very qualified energy nerds) said last year that there can be no new oil and gas extracted if we want to keep to a safe world.

There’s also other banks. No other major global bank has made a commitment like this. And they should be struggling to catch up. We’re now pressuring the likes of Barclays, RBC and Citi to pull their socks up and end funding for fossil fuels.

HSBC wouldn’t be ending funding for new oil and gas without thousands of us pushing them to do it. And now, together, we’re making sure all fossil fuel banks do the same.

RBC recently announced they intend to acquire the Canadian banking arm of HSBC Bank for $13B.

There was immediately push back from many corners of society, including numerous skeptical articles in the Globe and Mail about how this will limit competition and hurt consumers. The proposed deal still requires the approval of Canada’s banking regulator OSFI, the Competition Bureau (who are currently investigating RBC for greenwashing), and the Minister of Finance.

This is really bad news for the climate, because RBC is Canada’s #1 fossil bank, and HSBC is Europe’s. “A match made in greenwashing heaven” as one of our partners put it.

The National Observer reported:

A new front in the fight against climate change is emerging as Canada’s largest bank and top fossil fuel financier, RBC, plans to buy the Canadian arm of one of Europe’s top fossil fuel-financing banks, HSBC.

The planned acquisition would see two banks — both of which have faced serious accusations of greenwashing — combined. In October, Competition Bureau Canada opened an investigation into RBC for allegedly misleading Canadians about its climate performance. That same month, the United Kingdom’s Advertising Standards Authority found HSBC had misled consumers about how green it was in advertisements it put up a year ago.

Our partner Stand, working with environmental law firm Ecojustice, sent a letter opposing the merger to the Canadian regulators and politicians, urging them to reject this deal on competition and climate risk.

“Unfortunately, neither RBC nor HSBC has a credible plan for addressing climate change (a major systemic financial risk) and the misleading nature of their public climate commitments contrasted with their fossil fuel financing brings the integrity of their operations into question. Misleading consumers and making false climate promises while financing the primary driver of climate change is not in the best interests of Canadians or the financial system.

“Canada needs all economic actors to align with the goal of limiting warming to 1.5°C to reduce climate risks to the financial system and meet Canada’s domestic and international climate commitments. Greenwashing undermines the actions of institutions who are legitimately committed to and aligned with achieving net zero.”

Read the full letter on the Ecojustice website, and stay tuned for more as this story unfolds.

There has been a lot of activism on campuses across Canada this past year, as more and more students and even faculty realize that friendly-sounding RBC is actively investing on a future they don’t want to live in.

Whether it was the recent letter sent by Ivey business school students concerned about RBC CEO Dave McKay receiving an award from the university, seemingly continuous actions against RBC sponsored on campus events, or push-backs from faculty to RBC sponsored scholarships that reek of green- and red-washing.

Last week the student union at the University of Ottawa voted unanimously to cut all ties with RBC.

Then there was this prominent article in the University of Toronto’s student newspaper this week:Supporting RBC on Campus is Supporting the Climate Crisis. An excerpt:

Encouraging students to bank with RBC is encouraging them to support a company that depends on environmental degradation for success. By allowing RBC On Campus to take place at U of T, the university is … letting the actions of the country’s largest financier of fossil fuels be swept under the rug. Fossil fuel funders don’t belong at U of T, and severing partnerships with banks involved in the fossil fuel industry represents dedication both to the climate and to our futures.

Partnering with universities makes RBC seem like a champion of the younger generation. But this is a façade that obscures its true actions — RBC cannot claim to champion youth while simultaneously destroying their future. Fossil fuels are systematically eroding the biosphere’s capacity to support future generations, and to let its financiers onto our campus is to turn a blind eye to the realities of their environmental impact.

Read the full article at the U of T’s The Varsity website.