HSBC promise $100bn climate finance flows; BNP Paribas halt shale oil financing

HSBC promise $100bn climate finance flows: ‘HSBC has promised $100bn of finance for low-carbon technology and sustainable development by 2025 as part of a package of measures to strengthen its commitment to tackling climate change and other “green” goals. … ‘Daniel Klier, HSBC’s head of strategy, said he believed his bank’s pledge was the biggest of its kind by a European or Asian lender and would be made in the form of bond issuance, loans and investment. [In addition, Mr Klier said]: “We will disclose our carbon footprint and stress test our lending book against carbon pricing.” (FT, 6 Nov)

The HSBC press release lists the pledges to:

• Source 100 per cent of its electricity from renewable sources by 2030, with an interim target of 90 per cent by 2025. By signing long-term agreements with suppliers, HSBC aims to support the development of new renewable power facilities
• Reduce its exposure to thermal coal and actively manage the transition path for other high-carbon sectors. This includes discontinuing financing of new coal-fired power plants in developed markets and of thermal coal mines worldwide
• Adopt the recommendations of the Task Force on Climate-related Financial Disclosures to improve transparency. In its next two Group annual reports, HSBC will give more details on its approach to climate-related risks and opportunities
• Lead and shape the debate about sustainable finance and investment. This includes promoting the development of industry-wide definitions and standards

BNP Paribas halt shale oil financing: ‘BNP Paribas is to stop doing business with companies whose primary activity involves oil and gas extracted from shale deposits or tar sands in one of the most aggressive steps so far by an international bank to reduce exposure to fossil fuels.’ (FT, 11 Oct). The Financial Times said the move ‘demonstrates mounting scrutiny from financial institutions of “climate risks” in their investment and financing activities’ and notes that in France ‘an “energy transition law” required institutional investors to disclose risks associated with climate change in their portfolios. Charles-Eduard van Rossum, president of Ravel & Co, a financial advisory firm, said the disclosure rule was forcing companies to react. “Many if not all French companies have tried to implement a strategy to take account of . . . increased focus from investors on climate-related matters,” he said. “Investors are going to be more sensitive to investing in companies that are perceived to have the wrong footprint.”

Bloomberg report that ‘BNP also repeated its target for 15 billion euros ($17.7 billion) in financing for renewable energy projects by 2020 and 100 million euros of investment in startups in areas such as power storage and efficiency. “This is definitely a pioneering policy among global banks,” said Jason Opena Disterhoft, a senior campaigner with Rainforest Action Network. “It’s a sign of things to come.” (Bloomberg, 11 Oct). The BNP press release also note that ‘BNP Paribas will not finance oil or gas exploration or production projects in the Arctic region.’

DZ Bank, the second-largest German bank, wants to step out of financing coal-fired power stations, according to Spiegel (7 Nov, in German only). In a letter to the ecological GLS Bank, DZ Bank say they have “come to the conclusion, in the future refuse new inquiries for project financing for coal power plants. … DZ Bank will thus exit the financing of coal-fired power plants.” (Note: quotes via google translate).

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