Top banks pumping billions into oil and gas expansion despite climate commitments, report says

‘Now is the time for banks to get real with the science,’ Carbon Tracker founder says

HSBC and Barclays were among top European banks who have given the most to companies involved in expanding fossil fuel production since 2016 in the report (AFP/Getty)

Leading banks have pumped billions into companies expanding oil and gas production despite their climate commitments, according to a new report.

HSBC, BNP Paribas and Barclays were among those who have given the most money to these firms since joining a net-zero alliance last year, campaign group ShareAction said.

This is despite the International Energy Agency (IEA) saying last May there was no place for new fossil fuel projects if the world wanted to reach net-zero emissions by 2050.

The new ShareAction report found 25 of the largest banks in Europe have given around £300bn to companies with plans to expand oil and gas production – including Shell and BP – since 2016.

All but one belong to the Net-Zero Banking Alliance, which commits to aligning lending and investment portfolios with reaching net-zero emissions by 2050.

Despite this, these 24 banks have given around £24bn to firms looking to expand production of fossil fuels since joining the international alliance last year, the report found.

It said more than half of this money came from HSBC, Barclays, BNP Paribas and Deutsche Bank – four of the Net Zero Banking Alliance’s founding members.

HSBC funded the most – around £6bn – in 2021, while BNP Paribas came second at just over £5bn and Deutsche Bank third at £4.2bn.

Mark Campanalde, the founder of Carbon Tracker, said the analysis “reminds banks that there is no pathway to net zero that involves funding an expansion ... fossil fuel [production]”.

He added: “Now is the time for banks to get real with the science, and announce a science-based moratorium on funding new fossil fuel projects.”

A HSBC spokesperson said: “We are committed to working with our customers to achieve a transition towards a thriving low carbon economy.” They said the bank would publish targets to align financing for the oil and gas sector with Paris Agreement goals in its annual report and accounts later this month.

A Deutsche Bank spokesperson said: “Carbon-intensive sectors account for only a small share of our loan book and based on publicly available data, our lending and underwriting activity in fossil fuels is significantly smaller than global peers.” They said the bank will measure and disclose the carbon intensity of its loan portfolio, as well as plans to adjust its footprint in line with climate targets, by the end of this year.

A spokesperson for Barclays said the bank has set a target for a 15 per cent absolute reduction in its financed emission from the energy sector by 2025 as part of its ambition to be a net-zero bank by 2050. They added: “We also have restrictions around the direct financing of new oil and gas exploration projects in the Arctic or financing for companies primarily engaged in oil and gas exploration and production in this region.”

BNP Paribas has been approached for comment.