Ginny Cleaveland, Deputy Press Secretary, Fossil-Free Finance, Sierra Club, ginny.cleaveland@sierraclub.org, 415-508-8498 (Pacific Time)
WASHINGTON, DC — Groups representing a broad section of the US climate movement are demanding that US banks halt funding for new oil and gas projects, following a dramatic change to European bank HSBC’s energy policy today.
Advocacy groups including the Sierra Club are calling on Citi, JP Morgan Chase, Wells Fargo, Bank of America and others to drastically cut their funding of fossil fuel projects and to follow HSBC’s commitment to stop directly financing new oil and gas fields and related infrastructure, via so-called project finance.
HSBC’s new policy also binds the bank to withdraw existing corporate finance if a transition plan is not produced or if, after repeated engagement, is not consistent with HSBC’s targets and commitments.
The move follows sustained pressure from investors, activists and community groups on HSBC to address its role in contributing to the climate crisis through its funding of fossil fuel projects. Pressure is on the bank to now close loopholes that allow loans to oil and gas companies at a corporate level that are still exploring and extracting new oil and gas.
In response to the announcement, Adele Shraiman, Campaign Representative with the Sierra Club's Fossil-Free Finance campaign, issued the following statement:
“This announcement from HSBC sends a strong signal that there is no future for fossil fuel expansion in a 1.5C-aligned world. With this new policy, HSBC sets a new bar for what banks must do in order to meet their own net-zero goals. But let's be clear — HSBC's new policy represents only the bare minimum. In order to be fully aligned with net zero, banks must phase out corporate-level financing for all companies expanding oil and gas. Now, all eyes are on the major American banks to ramp up the ambition of their own policies.”
BACKGROUND
Four US banks, JP Morgan Chase, Citi, Wells Fargo and Bank of America, are the top fossil fuel funders and make up one quarter of the total global funding for the industry. Between 2016 and 2021 these banks pumped over US$1.2 trillion into the fossil fuel sector. Citi is the biggest funder of state-run fossil fuel projects in the Amazon and the biggest funder of fossil fuel expansion in Africa.
Banks headquartered in the US are increasingly being left behind by their global peers. Last month, UK bank Barclays announced to investors it would bring forward its coal power phase out date for the US by five years to 2030, following pressure from investors and the introduction of the Inflation Reduction Act in the US, which provides funding for renewables making them cheaper and more attractive to finance. The US law has failed to prompt a change in policy for banks based in the US.
See responses from other groups including Rainforest Action Network, New York Communities for Change, Stand.earth, and Stop the Money Pipeline here.
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.