UK Banks Defend Climate Record Despite Billions Lent to Fossil Fuel Industry This Year

Climate activist group Extinction Rebellion is currently protesting against the funding of coal, oil and gas projects around the world by London’s financial sector.
UK Banks Defend Climate Record Despite Billions Lent to Fossil Fuel Industry This Year
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Standard Chartered headquarters in London.

UK banks HSBC and Standard Chartered have rejected criticism of their commitment to tackling climate change, despite financing over £5 billion worth of fossil fuel developments in the first half of this year.

Barclays, responsible for £3.2 billion of fossil fuel lending, did not respond to a request for comment following the publication of new analysis on the UK’s top three coal, oil and gas funders.

Analysis by environmental campaign group Market Forces found that HSBC financed £3.3 billion ($4.5 billion) in fossil fuels through loans and bond arrangements in the first half of 2021, while Standard Chartered financed £2.2 billion ($3.1 billion).

It comes as Barclays is announced this week as the first sponsor of October’s Global Investment Summit for green investors hosted by the Queen at Windsor Castle, ahead of the COP26 Climate Summit in November.

The three banks are the UK’s top funders of fossil fuels globally, according to the Rainforest Action Network. Barclays is the seventh largest funder in the world, while HSBC is the 13th, and Standard Chartered the 34th. 

A report by the group Reclaim Finance earlier this year found Standard Chartered is also the UK’s top financer of new coal plants in Asia. 

Market Forces said it exposed the banks’ “empty words” on tackling climate change, while one campaigner likened the findings to the film “Groundhog Day”. 

It comes as Extinction Rebellion campaigners are protesting across London against the UK financial sector’s funding of fossil fuels around the world. The UN and International Energy Agency have called for an end to new fossil fuel developments if the Paris Agreement’s targets are to be met.

‘Like Groundhog Day’

In June, HSBC and Standard Chartered were part of a £4.3 billion (US $6 billion) bond issuance to Aramco, the Saudia Arabia-based oil giant and world’s single biggest emitter. In the same month HSBC was also part of a £1 billion ($1.5 billion) bond deal with Qatar Petroleum, operator of the world’s largest gas field, to expand its fossil fuel business. 

DeSmog research has found that over 86 percent (13 out of 15) of HSBC’s board of directors have current or past ties to polluting companies and industries. 

83 percent (10 out of 12) of Barclays’ board of directors have current or past ties, as do 71 percent (10 out of 14) of the board at Standard Chartered. 

HSBC and Standard Chartered did not dispute the figures given by Market Forces when contacted, and instead pointed to the steps they are taking to achieve net zero emissions. Barclays did not respond when contacted.

Adam McGibbon, UK Campaign Lead at Market Forces, said: “Our Race To Disaster prize is one award these banks won’t want to receive.

“Barclays, HSBC and Standard Chartered keep telling us they care about climate change, but every month they show how empty their words are by signing deals expanding the scale of the fossil fuel industry. 

“Scientists and energy experts couldn’t be clearer – climate action means no new coal plants or oil and gas fields can be approved, as of this year. So why are these three UK banks still funding companies who are expanding the fossil fuel industry?”

An HSBC spokesperson said: “HSBC is firmly committed to aligning its provision of finance to net zero by 2050 or sooner.  

“We have committed to phase out thermal coal financing by 2030 in EU and OECD markets and by 2040 globally and to set out short and medium term transition targets for the oil and gas and power and utilities sectors. 

“Since January 2020, we have provided $87.4 billion [£63.6 billion] in sustainable finance to support our customers across sectors to decarbonise, and expect to provide between $750 billion [£546 billion] and $1 trillion [£728 billion] towards the net zero transition by 2030.”

A spokesperson for Standard Chartered said: “We have made major strides in our coal policy over the past few years. We continue to review our positions in light of stakeholder feedback and intend to remain leaders in articulating a path to net zero by 2050.

“We are committed to detailed transparency on our transition strategy and plan to put it to a shareholder advisory vote in 2022.”

Wolfgang Kuhn, Director of Financial Sector Strategies at campaign group ShareAction, which works to push companies in a more climate-friendly direction at shareholder meetings, said: “It feels like a very unromantic version of Groundhog Day: You wake up, look at the world in flames and smoke, and tell these banks that their financing of fossil fuels needs to end. 

“The banks squirm, they throw you phrases about missing data or fairness and justice. They talk up their trillions in green lending and they make pledges and join initiatives that demand no immediate action. 

“Exhausted, you go to bed. And tomorrow you wake up to the same smoke, the same flames.”

UK Banks Defend Climate Record Despite Billions Lent to Fossil Fuel Industry This Year
Adam Barnett is DeSmog's UK News Reporter. He is a former Staff Writer at Left Foot Forward and BBC Local Democracy Reporter.

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