Financing Fossil Fuels: HSBC Accused of Greenwashing After $1B Deal

HSBC, the London-based universal bank and financial services group, is under fire for raising $1 billion for the Anglo-Swiss commodity trading and mining company, Glencore, breaking its vow of refraining from funding organizations that contribute to enhanced coal production. In the process, it has infuriated many of its investors and customers because of its lack of environmental accountability concerning the Glencore coal deal. 

The Bureau of Investigative Journalism (TBIJ) found evidence to the contrary, indicating that HSBC has helped Glencore raise a substantial amount of money to back its coal production, which it had been increasing over the past two years. 

Interestingly, Glencore runs two more coal mines, one of which is the Tweefontein mine in South Africa, which is extremely polluting, and the second one is the Cerrejon mine in Colombia, which is well-known for its array of critical human rights and environmental issues.

The Chief Investment Officer at Akademiker Pension has said that they don’t think there’s any scope for backtracking without it dragging HSBC’s name through the mud. Akademiker Pension is a Danish pension fund that serves as one of the investors of HSBC. The organization has reached out to the bank to ask it to comply with and take the required action on its climate promises. 

While examining data from bank.green, which is a climate-oriented bank switching platform, is responsible for checking banks’ lending activities against their commitments involving funding coal companies, TBIJ found some shocking information. They found that companies like HSBC, Barclays, and Santander, have all been responsible for breaking their promises in 2023 while Lloyds and NatWest have followed their commitments to the T.

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The senior Climate and Resilience Advisor of ActionAid, an NGO and among the top HSBC customers, Zahra Hdidou, has expressed shock at the lack of accountability within HSBC itself. She has said, “Despite its own ‘green’ rhetoric and what they would like the public to see and think about their ethics, HSBC is clearly falling short, neglecting its responsibility to the planet while keeping its customers in the dark about the true impact of its financing.”

Surprisingly, HSBC is not the only bank that has gone back on its promises of late; there are a number of others who have done the same. HSBC has also done away with several of its emission targets while incorporating changes to its coal policy, which is also a climate policy breach. In addition, it has removed the chief sustainability officer role from its executive board altogether.

Yet another of the bank’s core investors is Epworth Investment Management, serving dual roles of a key customer and investor pertaining to its shares and bonds. Andrew Harper, the company’s chief executive, has expressed disappointment in HSBC’s actions by calling into question its coal policy and how it has managed to raze it to the ground. About the Glencore deal, he has said that it “goes against both the spirit and the letter of HSBC's policy.” He also added that there’s no grey area involved in this matter and that a clear line has been crossed. 

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In response to TBIJ’s insights, HSBC has shared that it diligently adheres to sustainability risk policies that back its target of achieving net-zero emissions by 2050. They had nothing to add as far as client relationships are concerned. 

We can count coal among the dirtiest fossil fuels the world over, and safely say that it’s the primary contributing factor toward global warming and a critical source of air, land, and water pollution. 

The massive Cerrejón coal mine in Colombia, owned by Glencore, is symbolic of the manner in which global companies function without considering the repercussions of their actions in developing countries. It is disheartening to note that people who live in the vicinity of the mine experienced headaches, breathing issues, and poor eyesight, thanks to the open-pit mining that goes on 24 hours a day and seven days a week. What is equally appalling is that the mine blocks local water streams that people need and pours polluted water back into them.

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Source: TBIJ