Big Shift progress report

Every year the impacts of financing the burning of fossil fuels get more serious — are UK banks doing enough?

It’s been a busy few weeks in the world of banking. And likewise for all of us campaigning hard to get the banks to do better.

We’re mid-way through the Annual General Meeting (AGM) season when the biggest companies hold meetings open to all shareholders, and when the whole board is present to be questioned by them. So far, we’ve been present at HSBC, Barclays, Lloyds and Standard Chartered AGMs to make sure that climate change is a core issue on the agenda.

As the biggest UK banks, HSBC and Barclays manage enormous amounts of money. That means that they wield the most potential to set us on course to a stable climate — and do the most damage if they fail to act.

HSBC: new energy policy

• Released the same day as their AGM, HSBC’s new policy notes that most fossil fuels will need to stay in the ground if we are going to limit temperature rise. It’s great that they have recognised this, but the crucial thing is what they do about it!
• The new policy rules out direct funding for new coal plants…almost. The exception is that HSBC will continue to fund new coal plants in Indonesia, Vietnam and Bangladesh, if the evidence suggests that there are no alternatives. The Financial Times reported this new policy as a ‘Big Shift’ and described its timing as an attempt to ‘seek to head off criticism from pressure groups.’ This means we’re making progress!
• However, these three countries are all particularly vulnerable to a changing climate. We firmly agree that millions of people around the world have a right to energy access that they are currently without — but coal is not the solution. We know that coal power doesn’t reach the poorest, and that it comes with added health risks for local communities as well as the global climate implications of locking countries into dirty energy for years to come. These countries have massive potential for renewable energy, and various studies indicate that renewables will be cheaper, cleaner and more secure than fossil fuels.
• The ban on direct funding leaves the door open to indirect funding, and this is something that we’ll be watching closely to see if the policy is really up to scratch.

Barclays: new coal statement

• Barclays followed HSBC by ruling out the funding of new coal projects in rich countries and putting heavier restrictions on funding coal in poor countries.
• It also introduces a threshold that means they won’t fund companies that make more than 50% of their money from coal.
• When questioned repeatedly about the bank’s financing of climate change at the AGM, the Barclays Chairman reiterated a commitment to continue looking at how to improve climate-related policies and ensure they are in line with the Paris commitment. Currently they are not.

Lloyds: good intentions

• Lloyds has committed £3 billion to clean and low carbon finance which is a good start — but Lloyds’ lending business is £100 billion, proving that they must be able to do better.
• The bank has no timeline to phase out commercial lending to fossil fuels, despite its claim in its annual report that it is committed to the Sustainable Development goals.
• When questioned at the AGM, they failed to commit to a timeline to stop lending to fossil fuel companies or increase transparency about its exposure to high carbon assets.

RBS: great start

• RBS also announced a raft of changes on the day of its AGM, saying that ‘There is growing interest in the role banks can play in tackling climate change.’ A lot of that interest is thanks to you and thousands of others making it clear that it’s not ok for our banks to fund the destruction of our planet.
• There’s plenty of good news in the new policies. We welcome the news that RBS has announced a phase out of project finance to all new coal power projects and thermal coalmines, is restricting the financing of companies involved in coal mines or coal power and has announced £10 billion for renewable energy projects in 2018–20.
• However, we’re still concerned that RBS’ policy to restrict lending to oil and gas only includes the most extreme forms of tar sands and Arctic oil — leaving them open to continue funding fossil fuels.

All these policies are potentially steps in the right direction. The problem is that they are baby steps at a snail’s pace. People around the world who are already feeling the effects of climate change do not have the luxury of time. Every year the impacts of financing the burning of fossil fuels get more serious; more floods that force people out of their homes, more droughts that damage people’s crops, stronger typhoons that put people’s lives at risk. This is the reality we all face unless we can make the Big Shift to safe and clean energy happen much more quickly.

The banks all say that they are open to engagement with stakeholders to improve these policies and positions. We are stakeholders — the actions of the biggest banks will affect us all. It’s up to us to tell them that they are not doing enough to protect the planet and all of us who rely on it. The world’s poorest people have neither savings nor investments, but are dealing with the consequences of the decisions made by money managers for those who do.

You can keep up the pressure on the banks by emailing them now, and replying to their standard replies. In these messages, they try to assert that they are doing all they can to tackle climate change. They are not. Here are some tips on what to say to each of the four banks.