Groups representing a broad section of the US climate movement are demanding that US banks halt funding for new oil and gas projects, following a dramatic change to HSBC’s energy policy today.
Climate finance and grassroots community groups are calling on Citi, JP Morgan Chase, Wells Fargo, Bank of America and others to drastically cut their funding of fossil fuel projects and to follow HSBC’s commitment to stop directly financing new oil and gas fields and related infrastructure, via so-called project finance.
HSBC’s new policy also binds the bank to withdraw existing corporate finance if a transition plan is not produced or if, after repeated engagement, is not consistent with HSBC’s targets and commitments.
The move follows sustained pressure from investors, activists and community groups on HSBC to address its role in contributing to the climate crisis through its funding of fossil fuel projects. Pressure is on the bank to now close loopholes that allow loans to oil and gas companies at a corporate level that are still exploring and extracting new oil and gas.
Rainforest Action Network, New York Communities for Change, Stand.Earth, Stop the Money Pipeline and the Sierra Club said US banks were the biggest funders of fossil fuel projects in the world and are still refusing to make real commitments on climate.
Four US banks, JP Morgan Chase, Citi, Wells Fargo and Bank of America, are the top fossil fuel funders and make up one quarter of the total global funding for the industry. Between 2016 and 2021 these banks pumped over US$1.2 trillion into the fossil fuel sector. Citi is the biggest funder of state-run fossil fuel projects in the Amazon and the biggest funder of fossil fuel expansion in Africa.
Banks headquartered in the US are increasingly being left behind by their global peers. Last month, UK bank Barclays announced to investors it would bring forward its coal power phase out date for the US by five years to 2030, following pressure from investors and the introduction of the Inflation Reduction Act in the US, which provides funding for renewables making them cheaper and more attractive to finance. The US law has failed to prompt a change in policy for banks based in the US.
Aditi Sen, Climate and Energy Director of Rainforest Action Network:
“Each year the report on fossil fuel funding which shows banks headquartered in the US are the biggest culprits when it comes to fueling the climate chaos, yet their commitments are flimsy at best and deliberately negligent at worst. Today HSBC has made a big step forward on climate, which proves that US banks can step it up to do the same.”
Rachel Rivera from New York Communities for Change said:
“As a Hurricane Sandy survivor whose family lived through the horrors of Hurricanes Maria and Fiona, US banks are laughing in the face of communities like mine who have lost loved ones, houses and livelihoods in floods, forest fires and heatwaves. While banks make record profits from fossil fuels, people are suffering. It is sickening to know that banks in other parts of the world are acknowledging their role and acting while in the US, it’s just business as usual.”
Adele Shraiman, Campaign Representative for Sierra Club’s Fossil Free Finance Campaign said:
“This announcement from HSBC sends a strong signal that there is no future for fossil fuel expansion in a 1.5C-aligned world. With this new policy, HSBC sets a new bar for what banks must do in order to meet their own net-zero goals. But let’s be clear– HSBC’s new policy represents only the bare minimum. In order to be fully aligned with net-zero, banks must phase out corporate-level financing for all companies expanding oil and gas. Now, all eyes are on the major American banks to ramp up the ambition of their own policies.”
Lindsay Meiman, Stand.earth Climate Finance Media Director, said:
“Communities in the Amazon are experiencing firsthand just how destructive Citi and US banks’ fossil fuel funding is. There’s no excuses left for Citi to fail to explicitly stop financing new oil and gas fields and extraction in the Amazon. It’s time for the world’s largest Amazon oil financier to step up for our climate, communities and people. US banks must stop being laggards and become leaders in the climate fight.”
Arielle Swernoff from Stop the Money Pipeline said:
“There is growing pressure from bank workers, bank customers, investors and people on the frontlines of the climate crisis on US banks to take action on climate. But they are refusing to listen to these important stakeholders and instead remain committed to a dying industry that presents too many risks and too little rewards. For US banks, which only a few years ago were given billions of dollars in bailout money by US taxpayers, this a shocking dereliction of duty.”
Press contact: Judith Crosbie +1 9295843344
For data on fossil fuel funding by banks see: https://www.bankingonclimatechaos.org/
For information specifically on how much US banks have contributed to Fossil Fuel Expansion since the Paris Agreement, see: Wall Street’s Dirtiest Secret.