HSBC to end funding for new oil and gas fields

HSBC has announced it will stop financing new oil and gas fields, as part of its efforts to drive down global greenhouse gas emissions.

Environment groups said the move sends "a strong signal" to fossil fuel giants that investment is waning.

Europe's largest bank said it made the decision after receiving advice from international energy experts.

It comes following previous criticism of HSBC for funding oil and gas projects despite its green pledges.

Jeanne Martin, head of the banking programme at ShareAction, a charity that campaigns for reducing investment for fossil fuels like oil and gas, 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."

The charity called on other banks to follow suit - saying this move sets a "a new minimum level of ambition" for the sector.

In 2020, HSBC made a pledge to be "net zero" - which means not adding to greenhouse gases already in the atmosphere - and investing and loaning up to $1 trillion (£806bn) in green projects.

However, the bank came under criticism earlier this year when it was revealed it had invested an estimated $8.7bn (£6.4bn) into new oil and gas in 2021, according to ShareAction.

In the update to its energy policy, the bank said the decision had been made "follow[ing] consultation with leading scientific and international bodies" who had estimated that current oil and gas fields would meet any demand in 2050 under a "net-zero" scenario.

Under the 2015 Paris Agreement, 197 countries agreed to try to keep temperature rises "well below" 1.5C to avoid the worst impacts of climate change.

Experts say that to achieve this, net zero must be reached by 2050.

• What does net zero mean and how are countries doing?

HSBC follows Lloyds bank - Britain's biggest domestic bank - which announced a similar decision in October.

Tony Burdon, chief executive at climate finance campaign Make My Money Matter, said: "it's another nail in the coffin for fossil fuel expansion, and a massive signal to other UK banks that the game is up on new oil and gas."

In October, the UK government announced a new round of North Sea oil and gas licences

It is not yet clear if this is the beginning of a trend across the sector, but it comes just months after the UK government announced a new round of licensing for oil and gas production in the North Sea.

• New UK oil and gas licences defy climate warnings

HSBC has said it will continue to keep its investments already in oil and gas fields as it "recognises that fossil fuels, especially natural gas, have a role to play in the transition, even though that role will continue to diminish".