A new investigation into HSBC’s dealings reveals that in the four months before it made a commitment to go net-zero by 2050, the bank financed at least four companies that are actively involved in the construction of new fossil fuel infrastructure, as well as one oil and gas project.
Yes – you read that right. HSBC, which said it wants to align its portfolio of financed emissions to the Paris Agreement, played a fundamental role in facilitating the growth of the coal, tar sands, and oil and gas industry through these dodgy deals. It’s responsible for roughly $1.8bn worth of financing, according to the data from Eikon. And that’s just five bond and loan deals between June and September – the tip of the iceberg of its real fossil fuel financing in this period.
That’s mind-blowing. One of the main reasons HSBC said it wouldn’t stop financing fossil fuel companies was because it said it wanted to ‘work with [its] portfolio of customers to support them on their journey to lower carbon emissions’. CEO Noel Quinn told Reuters that the goal is not to turn clients away but to help them change their business model.
Any reasonable person might wonder how financing a specific oil and gas production and storage project could ever help that company transition. Similarly, the idea that providing finance to companies that are expanding infrastructure of the most environmentally destructive fuels on earth is somehow helping clients change their business model or supporting them on their journey to lower carbon emissions is both delusional and insulting.
The dodgy deals
Data from Eikon shows that on 22 September, less than three weeks before committing to net-zero, HSBC helped lead on a bond deal worth $1.24bn issued by Aker BP ASA, a Norwegian oil exploration and development company. Further exploration of oil reserves is in no way compatible with globally agreed climate goals.
Not even a week before this, the bank provided a healthy share of a $400m loan to help keep afloat an offshore oil and gas production and storage facility in Brazil.
ExxonMobil, whose history barely needs to be recalled to readers, received financing of $1.25bn from HSBC as part of a $10bn loan. HSBC is therefore complicit in this story of climate destruction, dither, and denial.
HSBC also took a leading role in a bond worth $1bn by Enbridge, North America’s largest energy infrastructure company. According to RAN, it has a long track record of oil spills and Indigenous rights violations. Enbridge is currently building a new pipeline which would be one of the largest crude oil pipelines in the world, carrying up to 915,000 barrels per day of tar sands crude.
In June of this year, HSBC took part in a $498 million bond issuance to KEPCO, one of Asia’s most aggressive expanders of the coal industry. 40% of KEPCO’s business relies on coal. It also continues to pour millions into expanding the coal sector, most recently by investing in the construction of two new coal-fired power plants in Indonesia.
Discredit where it’s due
Although these transactions predate the October 9 net-zero ambition announcement, they actually open the fossil fuel floodgates for years to come, precious years we don’t have. Bond and loans are real-world financing and will allow these companies to create real-world damage long into HSBC’s net-zero ambition. They are also a good indication of just how lightly HSBC takes its ambition, and the direction of travel of future financing decisions.
Campaigners will be watching HSBC like a hawk and the deals that it continues to push through in pursuit of a quick buck.
Net-zero means no financing of coal, tar sands, oil and gas, and companies linked to deforestation. Europe’s second largest financier of fossil fuels has urgent work to do to reduce this for its net-zero ambition to maintain a pinch of credibility.