HSBC lends billions of dollars to fossil fuel companies, every year. And it’s creating a headache of their own making.

Last week, HSBC was caught out by the UK ads regulator for greenwashing, and forced to come clean about its cosy relationship with the world’s worst fossil fuel companies. Today, the Bureau of Investigative Journalism and Source Material are uncovering evidence that HSBC’s “green” investments are actually funding the climate crisis. And it’s making news at the BBC and the Times.

HSBC has a target to fund $1 trillion in ‘green’ or ‘sustainable’ projects by 2030, in order to help the world accelerate to cleaner sources of energy. At first glance, it’s an admirable endeavour. We need more green infrastructure to replace harmful fossil fuel ones. However, journalists looked into exactly what HSBC was counting as sustainable. The answers are pretty scary.

In the pot of HSBC’s green finance – which the bank directly facilitates – we have the following:

  • A cement company in India which breached legal air pollution levels when carrying out deforestation
  • An engineering company starting construction on an environmentally devastating oil pipeline in East Africa
  • A company creating giant ships that drill for oil offshore
  • Airports and airlines expanding high-carbon travel.

Added up, this makes $2.4 billion in financing that is not doing what it says on the tin, but which HSBC says is tackling climate change.

But is this really surprising from a bank who is in bed with Saudi Aramco – the worlds single worst polluting oil company? Aramco promised to drill “every last barrel” of oil. And HSBC are lending them the cash to do it. That doesn’t sound like a bank “helping to lead the transition to a more sustainable world”.

Collage of HSBC and Saudi Aramco oil projects
 

HSBC is coming under an avalanche of pressure, with customers, shareholders, and the media wising up to its greenwashing and fossil fuel funding. It’s hard to escape.

But it’s got a big opportunity to win back some credibility. It’s currently writing a policy that will dictate how it is allowed to fund oil and gas companies, for release by year end. It needs to go all out and leave fossil fuels in the past. It needs to cut off corporate financing and bonds facilitation for fossil fuel companies *expanding* extraction and exploration.

HSBC must drastically scale up their financing of genuinely clean infrastructure, rather than trying to paint their oil drills green.