UK banks are still funnelling billions into fossil fuels according to new research, while Barclays and HSBC remain among the worst in the world.
The latest Banking on Climate Chaos report reveals that 60 banks have provided $3.8 trillion to the fossil fuel industry in the last five years. It’s a staggering amount and hard to comprehend – just think what could be achieved if that amount were to be invested in creating a low-carbon economy instead.
US, Canadian and Japanese banks lead the pack, but UK banks are not far behind. Barclays is still the seventh worst bank, supplying $144.89 billion since 2016, and retains the dubious honour of being the worst in the UK as well as Europe.
HSBC, however, drops a place in the rankings to come in at 13th and $110.74 billion. That shouldn’t be taken to mean that HSBC has improved in any way, but that other banks have done somewhat worse.
Other UK banks also make an appearance in the top 60. Standard Chartered has mustered just over $34 billion, while NatWest and Lloyds are in for over $2 billion each.
Many banks have made a lot of noise about supporting the goal of the Paris climate agreement to keep global heating below 1.5ºC. Yet not a single one has financing policies in line with that aim.
Some, such as Barclays and HSBC, have made vague promises to achieve net-zero carbon in their financing decisions by 2050 but with none of the detail to show how they intend to get there. HSBC has proposed to phase out investment in coal, oil and gas and, while this is a big step forward, nothing is down on paper yet and it remains to be seen how ambitious this new policy will be.
Compared to last year’s report, there has been a fall in overall fossil fuel financing which is down by 9%. Sadly, this isn’t a sign that banks are finally ending their role in the climate crisis, but a blip caused by the economic disruption of the pandemic. Last year, more financing was provided than in 2016, and the overall trend is still going in the wrong direction – up.
Fossil fuel companies are still expanding their operations, but they can’t operate without funding, so the 60 banks listed in the new report wield enormous power. They need to take the opportunity presented by the economic downturn and rapidly reduce their investments in coal, oil and gas so they reach zero in the not-to-distant future. And that means action this year, not kicked into the long grass of 2050.
Here are some of the comments other campaigners have made about the new revelations:
“For too long regulators have been asleep at the wheel, allowing banks to pump up a carbon bubble that will burst with catastrophic effects to the environment and the economy. With a make-or-break COP climate summit coming up in November, this should be a wake-up call for central banks and supervisors to take concrete action to penalise or restrict risky fossil fuel lending. UK banks like Barclays and HSBC are undermining the British government’s hopes to lead the way in green finance. There can be no more excuse for delay from the Bank of England in addressing this, especially now that the Bank’s remits for both financial and monetary policy have been updated to reflect the need to take action on environmental breakdown.”
Simon Youel, head of policy and advocacy at Positive Money
“Banks are failing at the first climate hurdle by failing to curb their financing of some of the most polluting industries, such as coal and oil sands. In the UK, Barclays, HSBC and Standard Chartered – all of which have committed to net-zero by 2050 – stand out for increasing their financing of the coal power industry in 2020 relative to 2016. Barclays’ love affair with the oil sands industry shows no signs of stopping either. Its financing levels of the oil sands industry were higher in 2020 than in 2016. With the 2021 AGM season upon us, investors should consider using their voting rights to drive change at banks that continue to resist calls to reduce their financing of Paris-misaligned activities.”
Jeanne Martin, senior campaign manager at ShareAction
“Despite the new climate policies Barclays announced last year, it is still the biggest funder of fossil fuels in Europe since the Paris Agreement was signed, pouring another $27.7 billion into coal, oil and gas last year. This is shameful. Investors are increasingly astute at seeing through greenwash and we’re hoping at this year’s AGM they give Barclays a mandate to curb their financing of all fossil fuels in line with the Paris climate goals.”
Adam McGibbon, UK campaign lead at Market Forces, which has lodged a shareholder resolution for the Barclays Annual General Meeting in May