Banking industry slammed for climate hypocrisy as latest fossil lending figures released

HSBC and Barclays named the biggest financers of ‘brown’ assets in Europe, despite recent pledges

Barclays is under renewed fire after being named Europe’s biggest fossil fuel lender, in spite of the bank’s recently-announced net-zero ambition.

Between the end of 2015 and 2019, Barclays lent almost £91bn to fossil fuel companies, according to a report released by a group of NGOs, led by environmental campaign group 350.org.

HSBC is ranked second worst in Europe, with £67bn of support for the industry over the same period.

Last month, Barclays pledged to become a “net-zero bank” by 2050, following a shareholder resolution filed by campaign organisation ShareAction. However, the bank has taken “no meaningful measures” to curb fossil fuel financing, the report said, and remains among the top ten global funders of tar sands.

The report, Funding climate chaos: How UK banks are continuing to fund the climate crisis, found that 35 global banks have invested £2trn in the fossil fuel industry’s continued growth since 2016, the year the Paris Agreement was signed, committing governments around the world to decarbonisation. It ranks Barclays seventh worst in the world for its financing of fossil fuels, and HSBC twelfth worst.

Caroline Lucas, MP and former leader of the UK’s Green Party, said that the figures “demonstrate that several years on from the Paris Agreement, major UK banks, despite their progressive rhetoric, are not taking meaningful steps towards the necessary phasing out of all fossil fuel financing”.

The report urges regulatory bodies like the Bank of England to implement regulations to shift investment away from high-carbon sectors and prevent banks from using the COVID-19 emergency to roll back existing or planned climate regulations.

It comes alongside another report from environmental finance watchdog Market Forces, which found that HSBC was financially backing 18 of 33 of the world’s largest publicly-listed coal plant developers.

Market Forces Executive Director Julien Vincent said: “HSBC has been part of the chorus of banks to laud the Paris Agreement and claim its business will support the Agreement's goals. But the reality is through corporate loans, bonds, underwriting and institutional investment, HSBC is well and truly embedded in the coal industry.”

HSBC announced in April 2018 that it would “stop financing new coal-fired power in all countries around the world”, excluding Bangladesh, Indonesia and Vietnam – three of the countries with the largest pipelines in the world.

The report pointed out that HSBC has stakes in companies including Korea’s KEPCO, which is attempting to buy into two new controversial coal power plants in Indonesia and Vietnam, Japan’s Sumitomo Corp, which is pushing ahead with power plants in Vietnam and Bangladesh that have both been cited for a failure to conduct adequate community consultation, and NTPC, India’s largest developer of new coal power plant capacity, with a massive 23 gigawatts under development.

Vincent said: “We urge HSBC’s Chairman and CEO to use the company’s AGM this Friday to signal a comprehensive overhaul of HSBC’s investment criteria, extending from project and corporate finance, to underwriting, fixed income and institutional investment. We need HSBC’s finance to stop greasing the wheels of the fossil fuel industry as soon as possible.”