In This Article:
HSBC has said banks ought to stop penalising clients with large carbon footprints amid a wider backlash against green finance.
Julian Wentzel, who was appointed chief sustainability officer at Europe’s largest bank this month, said overly restrictive policies on fossil fuels put energy security at risk.
“Too many people have been negatively biased towards the carbon economy without acknowledging that it plays a very important role from an energy security perspective,” he told Bloomberg.
The rise of environmental, social and governance (ESG) focused investing has seen big banks restrict funding for the fossil fuel industry in a way that has increased costs for oil and gas companies and limited their ability to develop new projects.
Critics say tight restrictions on funding now pose a threat to global energy security at a time when Europe is still scrambling to make up for the loss of Russian oil and gas supplies.
HSBC announced in November that Celine Herweijer, who was the bank’s chief sustainability officer since July 2021, had quit to “pursue new opportunities”.
Her move coincided with a cost-cutting drive by Georges Elhedery, the new HSBC chief executive, and a move to scrap the sustainability role from the bank’s executive committee.
Mr Elhedery announced last week that the bank was preparing to axe thousands of jobs across Britain as it increases its focus in China.
He has been spearheading a radical revamp of the lender that will slash $1.5bn of costs by the end of next year, with its UK operations set to bear the brunt of cost-savings.
HSBC also revealed it was retreating from some of its net zero climate targets because it was proving harder to reduce emissions than anticipated.
The bank had originally intended to slash emission reduction targets from its supply chain by 2030, but has now pushed this back by 20 years.
Many companies have watered down environmental pledges in recent months after the return of Donald Trump to the White House. His campaign slogan of “drill, baby, drill” formed part of a pledge to ramp up fossil fuel extraction.
On Wednesday, Murray Auchincloss, the chief executive of BP, admitted it “went too far, too fast” in its shift to net zero.
The FTSE 100 company said it would increase its oil and gas investment to $10bn (£7.9bn) a year as part of a net zero “reset” that involves the company slashing spending on renewables.
However, Aviva on Thursday reaffirmed its commitment to net zero, saying it was still committed to its goal of becoming a carbon-free company by 2040.
Amanda Blanc, Aviva’s chief executive, said: “As an insurer climate change is critical to us.” She said an increase in the frequency of catastrophe events worldwide appears to be “undeniably ... linked to climate change.”