UK Banks Linked to £75bn in Fossil Fuel Projects Abroad

HSBC and Lloyds are yet to respond to the report, and among those that have, some criticised it and defended their stance.
More than 117 carbon bomb projects were funded in 28 countries between 2016 and 2023.
Climate advocates urge the UK government to put a full stop to funding in any shape or form.

A new study by climate thinktank LINGO says that UK banks have pumped over £75 billion into "carbon bomb" projects abroad, dampening global climate change mitigation efforts.

Carbon bomb projects, by and large, are big oil, gas, and coal projects that have disastrous consequences and are harmful to the planet.

If money continues to flow freely into these projects without immediate regulatory intervention, they will release an enormous amount of carbon dioxide into the atmosphere and push global temperatures well above the 1.5°C cap set in the 2015 Paris Agreement.

According to the study, between 2016 and 2023, nine big names in the UK banking sector, including HSBC, Barclays, NatWest, Lloyds, and Standard Chartered, funded around 117 projects in 28 countries. These projects, if not reined in, could emit 420 billion tonnes of carbon emissions, equivalent to a decade’s worth of current global CO₂ emissions.

Notwithstanding the UK government's pledge to lower emissions and support extended to climate targets, the nation's financial sector has not pulled itself out of the fossil fuel business.

Climate campaigners say this would tarnish the UK's climate leadership image. They are urging the government to stop financial support for large-scale fossil fuel projects altogether rather than merely regulating emissions at home.

The report notes that the UK is playing a larger role in developing fossil fuel projects by acting as a financial hub for companies looking to explore their oil, gas, or coal drilling ambitions.

Fatima Eisam-Eldeen, a lead analyst at the Leave It in the Ground Initiative (LINGO), said: "Despite the UK’s seemingly ambitious climate plans, it is astonishing how much money has flowed from UK banks to companies worldwide developing the biggest climate-wrecking and damaging projects since 2016.

"Real climate ambition and leadership would mean proper financial regulation not only within the country but also beyond the country’s borders by stopping all financial flows to companies exacerbating the climate crisis we all suffer.”

HSBC topped the list by backing 104 carbon emission projects that could release 392 billion tonnes into the air, followed by Standard Chartered (75 projects), Barclays (62), Lloyds (26), and NatWest (20).

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As expected, a majority of them responded to the report by defending their climate goals, including low-carbon transitions and financing renewable projects, while HSBC and Lloyds seem to be in silent mode.

The banks that broke the silence questioned and criticised the methodology used in the report and said it is not fair to associate all emissions of a particular project with a bank simply because it funds the parent company. In contrast, researchers argued that banks support the company as a whole.

To understand the report in detail, click here to access it.

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Source: The Guardian