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Highlights
- Banks like Barclays, HSBC, and Deutsche Bank are funding new oil and gas despite supporting the UK’s net zero by 2050 goals.
- To achieve the net zero by 2050 goals, no new oil and natural gas fields should be added to the existing ones, as per the International Energy Agency.
The UK aims at achieving carbon neutrality and thus the Boris Johnson government strives to reach its net zero goals by 2050. However, billions of dollars are being pumped into new production of oil and gas by big banks, such as Barclays, HSBC, and Deutsche Bank. According to ShareAction, these banks are still funding new oil and gas even though they are a part of a green banking group led by UN, called the Net Zero Banking Alliance, which supports the net zero pledges. The charity firm said that these big banks should be forced to take up green projects from fossil fuel firms.
To achieve the net zero by 2050 goals, no new oil and natural gas fields should be added to the existing ones, as per the International Energy Agency. However, fossil fuel giants, such as BP, Shell, Exxon Mobil, and Saudi Aramco, are being flushed with money to expand their operations.
But according to data from consultancy Profundo, the funding channelised towards new oil and gas has declined from 2020 to 2021, owing to the pandemic-related loans given to the fossil fuel giants for their sustenance during these tough times. However, the funding has bounced back to the pre-pandemic levels in 2021.
Achieving the environmental targets is the key priority of HSBC and Barclays, as stated by them.
Let’s take a look at these 2 big UK banks which fund new oil and gas regardless of supporting net zero goals.
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HSBC Holdings plc (LON: HSBA)
Global investment bank and financial services group, HSBC Holdings plc, is the second-largest bank across the Europe. It is listed on the London Stock Exchange’s main market since 1991 and is a constituent of the FTSE 100 index. In 2021, funding worth around £6.4 billion (US$8.7 billion) was channelised by HSBC towards new oil and gas.
The market cap of the bank stood at £114,994.19 million and it has provided its shareholders with a return of 41.16% over the last one year as of 11 February, while its year-to-date return stood at 26.42%. HSBC Holdings plc’s shares closed trading at GBX 567.20 as of 11 February 2022.
Barclays PLC (LON: BARC)
London-headquartered global bank, Barclays PLC, primarily operates through its two divisions, namely Barclays UK and Barclays International. It is listed on the London Stock Exchange’s main market since 1953 and is a constituent of the FTSE 100 index. In 2021, funding worth around £3.32 billion (US$4.5 billion) was channelised by HSBC towards new oil and gas.
The market cap of the bank stood at £ 34,535.23 million and it has provided its shareholders with a return of 41.26% over the last one year as of 11 February, while its year-to-date return stood at 10.21%. Barclays plc’s shares closed trading at GBX 206.10 as of 11 February 2022.
