HSBC: Time to Reevaluate Fossil Fuel Bias

In a surprising shift, HSBC, one of the world's largest international banks, has called for a re-evaluation of the bias against fossil fuels in the financial sector. The bank's new stance, announced in February 2025, aligns with its previously stated net zero ambitions while acknowledging the role of fossil fuels in energy security and the transition to a low-carbon future.

HSBC's revised energy policy, informed by consultations with scientific and international bodies, seeks to balance three key objectives: driving down global greenhouse gas emissions, enabling an orderly transition, and supporting a just and affordable transition. The policy recognizes the need to maintain supplies of oil and gas in line with current and future net zero-aligned declining global oil and gas demand, while accelerating clean energy deployment.

The bank's new stance has significant implications for its relationships with fossil fuel clients. While HSBC will no longer provide new lending or capital markets finance for new oil and gas fields and related infrastructure, it remains committed to supporting its clients in their transition to a low-carbon future. The bank will engage with clients on their transition plans, evaluating their compatibility with HSBC's 2030 portfolio-level targets and net zero by 2050 ambition.

HSBC's revised energy policy is a testament to the bank's commitment to playing a significant role in the transition to a low-carbon economy. By acknowledging the role of fossil fuels in energy security and the need for an orderly transition, HSBC is taking a more nuanced approach to financing the energy sector. This approach aligns with the bank's long-term sustainability goals and demonstrates its commitment to driving meaningful change in the energy sector.

In conclusion, HSBC's new stance on fossil fuels is a welcome development in the financial sector's approach to the energy transition. By acknowledging the role of fossil fuels in energy security and the need for an orderly transition, HSBC is taking a more balanced and pragmatic approach to financing the energy sector. This approach aligns with the bank's long-term sustainability goals and demonstrates its commitment to driving meaningful change in the energy sector. As other financial institutions follow suit, the transition to a low-carbon economy will become more orderly and just.