Financing and deals with oil and gas companies will have a materially lower share in the energy portfolio of HSBC as new energy opportunities arise, the banking giant’s chief sustainability officer, Julian Wentzel, told Bloomberg in an interview on Thursday.
The UK-based banking group unveiled today its updated Net Zero Transition Plan, in which it eased the interim emissions targets for its oil and gas portfolio. The 2030 emission reduction target is now to reduce emissions in its business with the oil and gas sector by 14% to 30% from a 2019 baseline. The previous target was cutting absolute financed emissions by 34% by 2030.
HSBC reaffirmed its 2050 net-zero target for its financed portfolio, but noted that it is updating the interim targets as “Our customers are navigating complex and dynamic market conditions with the transition playing out at different speeds and from different starting points across sectors and geographies.”
“In some sectors and regions there has been significant progress; in others, the transition is proving harder and slower than anticipated,” HSBC said.
Wentzel told Bloomberg that financing for fossil fuels will likely increase in HSBC’s portfolio, but the finance will “decline materially” relative to HSBC’s total capital allocation to the energy sector.
HSBC is not considering further restrictions, according to Wentzel, who became the bank’s chief sustainability officer in February.
“We have to acknowledge that the removal of capital from the oil and gas sector doesn’t support the transition, because if they’re seeking to transition, we want to be party to and support that transition,” Wentzel told Bloomberg.
The world’s biggest banks raised their combined financing for fossil fuels by more than one-fifth last year, bucking a falling trend since 2021 amid a backlash against net-zero policies, especially in the United States.
After years of scrutiny and blacklisting from Republican states in the U.S. and lawsuits from Republican attorney generals, North American banks and asset managers began quitting net-zero alliances en masse following President Donald Trump’s election victory.
By Tsvetana Paraskova for Oilprice.com
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