Santander arranged billion-dollar oil bond after making green pledge

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Original article by Nimra Shahid Rob Soutar republished from The Bureau of Investigative Journalism under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

HSBC also helped on refinery deal that will boost Amazon oil production

The Pastaza River complex, the largest wetland in the Peruvian Amazon, is a hub of biodiversity. It is home to nearly 300 species of fish and rare birds, and a source of food for the numerous Indigenous communities that live there. Its freshwater tributaries, lakes and palm swamps offer a vital buffer against climate change and its international importance is recognised by Ramsar, the UN convention on wetlands conservation.

Slicing through this land is the Norperuano pipeline, a huge 1,100km structure owned by the national oil company PetroPerú. The pipeline has been the source of more than 53 oil leaks since 2013. PetroPerú spent more than $80m on cleaning up spills related to it between 2017 and 2020.

In December, PetroPerú hailed the completion of a $5bn, 10-year project revamping its Talara refinery on the country’s Pacific coast. This new-look facility will be the destination for huge amounts of oil being carried by the Norperuano pipeline across the country from the rainforest, where PetroPerú is set to drill at two controversial new sites. And working behind the scenes to aid the financing of this project have been major international banks that claim to hold strict green policies.

In 2021, Santander helped coordinate a bond that raised $1bn for PetroPerú, which sought funds to upgrade its Talara refinery and expand its capacity to process oil from the Amazon. Two years previously, it had ruled out providing finance or services for “projects or activities in recognised Ramsar sites”. HSBC, which has a similar policy restricting finance that affects wetlands, also worked on the deal.

The money raised by the bond was to be spent on the Talara upgrade, which PetroPerú says helped the facility “produce cleaner fuels” and expanded its processing capacity by nearly 50%, to 95,000 barrels of oil per day.

Much of that oil is likely to be transported through the Norperuano pipeline from the Peruvian Amazon, where PetroPerú has extraction contracts for two drilling sites, one of which also overlaps with the Pastaza wetlands.

“There can be no financing for a company that needs to expand oil production in areas as sensitive as Ramsar sites,” said Leila Salazar-López, executive director of Amazon Watch. She added that it was “difficult to understand” how a company that has demonstrated an inability to stop spills and repair its damage “can gain the confidence of ‘climate-responsible’ investors”.

Santander told TBIJ it did not comment on clients or transactions but said it “operates strict policies that govern our financing. This includes our social, environmental and climate change risk management policy, which governs our criteria to lend to sectors such as energy, mining, metals, and soft commodities.”

HSBC said: “We are committed to supporting a just transition in developing markets and are, therefore, engaging with clients on their transition plans and operating models. Our work with clients is in line with our policies which include specific standards for environmental and human rights considerations.”

Original article by Nimra Shahid Rob Soutar republished from The Bureau of Investigative Journalism under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Continue ReadingSantander arranged billion-dollar oil bond after making green pledge

Watchdog urged to probe Labour’s failure to declare value of HSBC donation

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Original article by Ethan Shone republished from OpenDemocracy under a Creative Commons Attribution-NonCommercial 4.0 International licence

Labour leader Sir Keir Starmer speaks at the Labour Business Conference on 1 February 2024  | Dan Kitwood/Getty Images

Party accused of breaching Electoral Commission rules by failing to publish value of staffer seconded from banking giant

The Electoral Commission has been urged to investigate Labour over its year-long failure to declare the value of a donation from banking giant HSBC.

HSBC seconded one of its staff members to Keir Starmer’s party in February 2023, in an arrangement that sees the bank continue to pay the staffer’s wages while they carry out work for Labour.

More than a year later, the party has still not published the value of this in-kind donation – an apparent breach of the Electoral Commission’s rules.

The former chair of the Committee on Standards in Public Life warned it is “absolutely crucial” that Labour follows the rules around declarations, and said the commission “should be looking at this”.

The HSBC staffer, whom openDemocracy is choosing not to name, works in shadow business secretary Jonathan Reynolds’ office in a part-time role focused on engaging with businesses.

They have appeared on every edition of the official register of MPs’ staff and researchers, which is updated monthly, since February 2023.

The register lists people who have parliamentary passes through their work for MPs, as well as any outside interests they may have, or benefits they have received over a certain value.

Prior to joining HSBC in October 2021, the staffer was previously a consultant at Westminster lobbying firm Portland Communications. They joined Portland in January 2020 from Labour, where they held a number of senior roles over 15 years, most recently working in the party’s HQ as the head of policy development and engagement.

Labour has accepted many in-kind donations of seconded staff members from banks, lobbyists and consultancies in recent years, but this is the first time it has failed to declare the value of such an arrangement.

Before Starmer took over the party’s leadership in 2020, Labour had banned such secondments over concerns that they amounted to “institutional corruption”, according to James Schneider, who was director of strategic communications for former Labour leader Jeremy Corbyn.

Schneider, now communications director at campaign group Progressive International, told openDemocracy: “If Labour policy is written by people who were, are or expect to be corporate lobbyists in the future, it will represent those corporate interests, not its members, unions or the public.

“In this way, the revolving door between corporate lobbying and Westminster is a form of legalised corruption that insulates the rich and powerful from democratic demands.”

He added: “With this seedy revolving door fully reinstated in Labour HQ, it’s no surprise that the party is busy rejecting policies that would benefit the many not the few.”

Political parties complete quarterly returns detailing all their donations received, with Electoral Commission rules stipulating that in-kind donations of staff time must be declared in the quarter that the arrangement began.

When openDemocracy contacted Labour about this story, the party said it had declared the donation and it would be published in the next set of returns, which relate to quarter four of 2023.

Sir Alistair Graham, who chaired the Committee on Standards in Public Life between 2004 and 2007, told openDemocracy “the Electoral Commission should be looking at this”.

Graham continued: “In the run-up to a general election when the leader of the Labour Party has stressed how he wants to demonstrate that the party will have the highest ethical standards of any government, it is absolutely crucial that they are seen to follow the rules.

“If the bank is facilitating the secondment then it is a donation which should be declared to the Electoral Commission, and the member of parliament who is supervising this secondment should really have declared it on the MPs’ register of interests.

“They’ve now got as their [chief of staff] Sue Gray, who used to be in charge of ethical standards in the Cabinet Office, so she should be overseeing that the rules are abided with and there’s full disclosure to the Electoral Commission.”

Last week openDemocracy revealed that Labour has accepted cash and in-kind donations worth £2m from banks, financiers and firms linked to the City of London since 2022.

Natwest and the lobbying firm Lowick seconded members of staff to Reynolds’ office in 2022 while he was the shadow City minister, and Reynolds’ successor in the role, Tulip Siddiq, currently has a financial services specialist seconded to her office from lobbying firm Global Counsel.

Tom Brake, director of democratic standards campaign organisation Unlock Democracy, said: “Any party receiving multi-million-pound donations from a particular industry, whether it is banking or building, has to be hyper-vigilant both about the transparency of any donations and the risk that that sector is unduly influencing Party policy.

“The Electoral Commission needs to examine whether the Labour Party has failed the first test, and the Labour Party needs to prove how it has avoided falling foul of the second.”

A HSBC spokesperson said “We are apolitical. We work with different political parties to advocate for our customers and build their understanding of the issues facing financial services. We have constructive conversations with both the government and the opposition in the UK.”

Labour declined to offer a comment or provide further details about the arrangement.

Original article by Ethan Shone republished from OpenDemocracy under a Creative Commons Attribution-NonCommercial 4.0 International licence

Continue ReadingWatchdog urged to probe Labour’s failure to declare value of HSBC donation

HSBC helped oil and gas industry raise $47bn despite net-zero pledge

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Original article by Josephine Moulds republished from The Bureau of Investigative Journalism under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

The bank’s work for businesses expanding production of fossil fuels is a stark contrast to its climate change promises

Every year business and world leaders jet into Davos to discuss climate change and other global issues at the World Economic Forum. And every year they are met with vigorous accusations of hypocrisy. Those accusations may well be levelled at the executives from HSBC – one of the world’s top funders of fossil fuel expansion – as they mingled with their peers in the pretty Swiss ski town this week, discussing how to develop a long-term strategy for climate, nature and energy.

HSBC says delivering a net-zero global economy is “a pillar of our strategy as a business”. In December 2022, the bank made the shock announcement that it would stop financing new oil and gas fields. Environmental campaigners celebrated, with the responsible investment charity ShareAction saying the decision set “a new minimum ambition for all banks committed to net zero”.

But on the same day, HSBC bankers started selling shares in the refining business of Saudi Aramco, one of the most aggressive expanders of oil and gas. An investor in HSBC told the Bureau of Investigative Journalism that the bank’s policy has been cleverly worded to allow it to fund some of the world’s biggest polluters while boasting about its green credentials.

An analysis of Refinitiv data by TBIJ has found that in the year since HSBC’s new policy was announced, the bank has helped raise more than $47bn (£37bn) for companies that are expanding the production of oil and gas, despite dire warnings from scientists that this will push the world beyond its survivable limits.

Fatih Birol, executive director of the International Energy Agency, told ITV News: “In the world, if we make large scale oil, gas and coal development, we cannot reach our 1.5 degrees target, full stop.” He said if a bank is serious about aligning its business with net zero, it cannot continue to fund companies developing new oil and gas fields.

Andrew Harper, chief responsibility officer at Epworth, an investment manager that holds HSBC shares, said: “[HSBC’s] policy, which is supposed to act as a safety net for the climate, is by design letting the bank circumvent its pledges by allowing them to adhere to the letter rather than the spirit of what they’re claiming.

“As investors, we’re not going to be fooled by the marketing, by the pledges, by these policies. We want to see real change and for them to seriously end new fossil fuel financing, no loopholes. Anything short of that is the bank trying to dupe its key stakeholders.”

HSBC said its policy allows the bank to continue providing finance “at a corporate level” and its approach “is based on the latest science for achieving net zero and follows the UN-backed approach for climate target setting and net zero alignment for banks”.

New projects, no problem

In its feted policy, HSBC notes that global demand for oil and gas to 2050 is “more than met by existing [oil and gas] fields”. It says the bank will therefore no longer provide finance for “new oil and gas fields and related infrastructure whose primary use is in conjunction with new fields”.

However, that has not stopped HSBC from funding companies that are exploiting new oil and gas fields, and providing the necessary infrastructure to do so.

In the first half of last year, HSBC, with other banks, helped the UAE’s state oil and gas company, Adnoc, raise $3.2bn from selling shares in its gas and logistics businesses. Adnoc will receive a further cash boost of $3bn in hefty dividends from Adnoc Gas.

Separately, HSBC helped arrange a $3.2bn loan for Borouge 4, a petrochemicals plant that will be a key customer for Adnoc’s gas, and was described by its project director as “an enabler of Adnoc’s growth strategy”.

Scientists agree that we cannot develop any new oil and gas fields if we are to limit global heating to 1.5C. Adnoc plans to increase oil production by 25% between 2023 and 2027, however, which would dramatically overshoot these limits.

Last year, Adnoc rubber stamped the exploitation of a vast new gas field off the UAE coast, which threatens a vital habitat for sea cows. Burning the gas Adnoc plans to extract from this field would produce 30m tonnes of carbon dioxide per year – more than Denmark’s annual emissions.

HSBC has similarly close ties with Saudi Arabia’s national oil company. The share sale for Saudi Aramco’s refining business, Luberef – which HSBC bankers were working on as it unveiled its new oil and gas policy – raised $1.3bn. After the share sale, Saudi Aramco remains a 70% shareholder of Luberef and has management control of the business.

A couple of months later HSBC bankers helped raise $3bn in bonds for Greensaif, a company set up for the sole purpose of taking a stake in Saudi Aramco’s gas pipelines business, alongside Saudi Aramco, which retained the controlling stake.

And in another wildly successful share offering, HSBC helped raise $1.2bn for Ades Holding, which provides oil drilling rigs primarily to Saudi Aramco, among other oil and gas expanders in the region. Adnoc and Saudi Aramco declined to comment.

Adnoc is investing heavily in offshore expansion in the United Arab Emirates Giuseppe Cacace/AFP via Getty Images

HSBC rejected the suggestion that its policies allow for financing that is at odds with a net zero transition. “Net zero-aligned scenarios require continued, though declining, financing of fossil fuel supplies to meet energy demand, security, and affordability during the transition.”

The bank said its policy makes clear that it will continue to provide finance for companies with transition plans that align with its climate commitments. “HSBC’s approach is to engage with our major oil and gas clients on their targets and transition plans, and to align our oil and gas financing portfolio to a 2030 net zero aligned financed emissions target.”

Transition plans

Saudi Aramco, the world’s biggest polluter, does not appear to be preparing for a transition away from fossil fuels. The company expects to grow oil production by 8% by 2027, and increase gas production by up to 60% by 2030. Last year UN experts sent a letter of concern to Aramco – and its banks, including HSBC – saying its ongoing expansion of fossil fuel production threatens human rights by worsening climate change.

HSBC has chased business in the oil-rich Middle East and was last year named the region’s best bank for financing by Euromoney. Julian Wentzel, HSBC’s head of global banking in the region, told the magazine: “We have been at the nucleus of every major deal in the region, providing the full suite of banking services to our valued partners.”

Ed Matthew, campaigns director of think tank E3G, told TBIJ: “There’s a complete conflict between [HSBC’s] ambition to be at the heart of Middle Eastern oil and gas development and their commitment to start to pull out of fossil fuel financing globally.

“They can’t have their cake and eat it. Either they’re serious about delivering on the Paris Agreement or they’re not. At the moment, they’re putting short-term profits ahead of a habitable planet.”

Aggressive fossil fuel expansion

HSBC also funded oil and gas businesses far beyond the Middle East. In December, the bank helped arrange a $5bn loan for TransCanada Pipelines, which is among the top companies in the world expanding infrastructure for oil and gas, according to the Rainforest Action Network. (TC Energy, which owns TransCanada Pipelines, said: “Sustainability is foundational in everything we do.”) A few weeks later, the bank helped secure a $4.7bn loan for Occidental Petroleum, which is buying a Texas oil driller to expand its operations in the biggest shale field in the US.

In Europe, HSBC was among the banks that arranged a $3.3bn loan for Eni, the Italian oil and gas expander. Eni announced last year that it plans to increase its oil and gas extraction by 3-4% a year until 2027.

Experts have praised HSBC’s oil and gas policy for prohibiting funding for infrastructure linked to new oil and gas fields, in addition to the projects themselves. But the bank has continued to raise money for companies involved in the frantic building of export terminals for natural gas on the US southern coast.

The expansion of gas drilling and export in the region has been described as a “carbon bomb” – if all the planned projects are built, the associated annual emissions would outstrip those of Russia. Last year, HSBC, together with a slew of other banks, helped arrange loans worth $14.3bn for two of the companies building gas export hubs in the region.

HSBC was also among a group of banks to arrange loans worth $6bn for Baker Hughes, which provides oilfield services and equipment to oil and gas companies around the world. It helped raise a further $790m in share sales for oil drilling services companies Saipem and Nabors during the year.

At Davos there has been plenty of debate about how to limit global heating to 1.5C but campaigners fear it will remain just that. “Davos has always been a lot of talk and not much action,” said E3G’s Matthew. He would like to see stricter regulation of fossil fuel funding. “We can’t just leave it in the hands of banks, we need stronger action by governments and central banks to help prevent these investments. They need to introduce penalties for banks which are continuing to finance fossil fuel expansion.”

Header image: A liquified natural gas terminal on the Texas Louisiana border in the United States. Credit: The Washington Post via Getty Images.

Reporters: Josephine Moulds
Environment editor: Robert Soutar
Impact producer: Grace Murray
Deputy editor: Chrissie Giles
Editor: Franz Wild
Production editor: Frankie Goodway
Fact checker: Alice Milliken

This reporting is funded by the Sunrise Project. None of our funders have any influence over our editorial decisions or output.

Original article by Josephine Moulds republished from The Bureau of Investigative Journalism under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Continue ReadingHSBC helped oil and gas industry raise $47bn despite net-zero pledge

95 UK Universities That Have Pledged to Divest from Oil and Gas Use Banks Funding Climate Crisis

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Original article by Max Colbert republished from DeSmog

Students have accused the institutions of ‘hypocritical and performative’ green commitments.

The Barclays UK headquarters. Credit: Gary Group Editor / Wikimedia CommonsCC-BY- SA-4.0

Almost 100 universities that have pledged to shed ties to the fossil fuel industry still bank with financial institutions that have collectively provided $419 billion (£345 billion) to polluting interests between 2016 and 2022. 

The new research, conducted by campaign group Make My Money Matter and obtained using Freedom of Information requests, shows that 95 universities still hold a bank account with one of five leading global fossil fuel funders: Barclays, HSBC, Santander, NatWest, and Lloyds.

These banks have supplied billions in financing to Shell and BP, which this year scaled back their climate targets, as well as to other oil and gas firms such as ExxonMobil and TotalEnergies. Barclays was the bank of choice, used by nearly three quarters (73 percent) of the universities.

Barclays was the largest European financier of fossil fuels between the signing of the Paris Agreement in 2016, which set a goal of limiting global warming to 1.5C, and 2022. The British bank propped up the oil and industry with $190.5 billion (£157 billion) in funding during this time, according to the annual Banking on Climate Chaos report from the climate campaign group Rainforest Action Network (RAN).

This story comes after DeSmog revealed earlier this month that UK universities have accepted £40.4 million in funding from fossil fuel companies since 2022. Students across Europe have protested at schools and universities since returning for the new academic year. In the UK, activists from Just Stop Oil have renewed their campaigning on campuses, targeting University College London, Birmingham, Sussex, Falmouth, and Exeter.

Over 100 universities across the UK, representing 65 percent of the higher education sector, have pledged to divest from the fossil fuel industry since 2014. Over 50 are yet to make any public commitments. 

Make My Money Matter says that it will be writing to universities and calling on them to ensure that their divestment commitments are not being undone by their banking choices. 

“Divesting from fossil fuels while banking with Barclays is hypocritical and performative,” said Jo Campling, welfare and sustainability officer at Sheffield University Students’ Union. “Universities claim they are striving for a better future by educating their students yet they continue to provide legitimacy to the financial institutions ignoring universities’ own scientists and driving us ever closer to irreversible climate breakdown.”

‘More Needs to be Done’

The universities that have held accounts with Barclays include Bristol, one of the “greenest universities in the UK”, University College London (UCL), the UK’s largest higher education institution by student population, and the University of Glasgow, the first UK university to commit to fossil fuel divestment.

Researchers analysed the period between April 2021 and April 2023. The threshold for a ‘banking relationship’ includes a current or deposit account held within the period, but excludes other services such as loans, credit facilities, or currency exchanges.

In 2022, Barclays was a major backer of unconventional oil projects, such as Arctic extraction and extraction from tar sands. The latter emits up to three times more global warming pollution than producing the same quantity of crude oil.

As of late 2022, following pressure from investors, Barclays has agreed to scale down its financing of oil sands operations. However, the new research shows both Barclays and HSBC remained among the top 10 (seven and eight respectively) global financiers of new fossil fuel expansion projects.

Barclays is facing heavy criticism for its ongoing role in facilitating climate breakdown, and its annual general meeting in May was disrupted by climate activists from Extinction Rebellion.

A spokesperson for Barclays told DeSmog: “Aligned to our ambition to be a net zero bank by 2050, we believe we can make the greatest difference by working with our clients as they transition to a low-carbon business model, reducing their carbon-intensive activity whilst scaling low-carbon technologies, infrastructure and capacity. 

“We have set 2030 targets to reduce the emissions we finance in five high-emitting sectors, including the energy sector, where we have achieved a 32 percent reduction since 2020. In addition, to scale the needed technologies and infrastructure, we have provided £99 billion of green finance since 2018, and have a target to facilitate $1 trillion in sustainable and transition financing between 2023 and 2030.”

Peter Vermeulen, chief financial officer at the University of Bristol told DeSmog that the university takes its “climate commitments seriously” and engages with major suppliers, including banks, “to see where positive improvements and changes can be made”.

Vermeulen added that, “I, like many others, am disappointed in Barclays’s climate performance, and that they only put a serious climate plan in place in 2020. In my previous role I actively engaged with Barclays on their lack of progress in this area and witnessed improvement. More needs to be done and for that reason, since joining the University of Bristol this summer, I will step that up even further, with university, staff, and student representatives involved in this.”

Rainforest Action Network has calculated that the world’s biggest banks poured $673 billion (£554 million) into fossil fuels in 2022, while DeSmog revealed in May that four in five bank directors at the six largest banks in the U.S. have ties to polluting companies and organisations, including major fossil fuel firms.

Commenting on the findings of the Make My Money Matter report, Nat Gorodnitski from Students Organising for Sustainability said: “If we want to stop the worst effects of climate change, we need to end fossil fuel funding. Banks are the biggest funders by a long way and rely heavily on the higher education sector for recruitment, reputation, and business, while their fossil fuel financing contradicts academic research, university policies, and students’ needs. 

“This gives students and universities the unique power to pressure banks to end their fossil fuel financing in a meaningful way, and call for a shift to funding sustainable energy.”

A spokesperson for HSBC said: “Supporting the transition to net zero and engaging with clients to help them diversify and decarbonise is critically important to us. We are committed to aligning our financed emissions to net zero by 2050.”

A University of Glasgow spokesperson that the university “is committed to doing our part to tackle the climate emergency. In 2014, we pledged to divest our holdings in companies involved in the oil and gas sectors over a 10 year period, and have already achieved this. We have also set an ambitious target to achieve net zero greenhouse gas emissions by 2030. Our socially responsible investment policy is regularly reviewed.”

Original article by Max Colbert republished from DeSmog

Continue Reading95 UK Universities That Have Pledged to Divest from Oil and Gas Use Banks Funding Climate Crisis

‘This Is Absurd’: Major Banks Continue to Fund Climate Chaos in Global South

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Original article by OLIVIA ROSANE republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0). 

ActionAid found that since the Paris agreement, banks have funded the largest Big Ag companies doing business in the Global South to the tune of $370 billion and the fossil fuel sector to the tune of $3.2 trillion.

Since the international community promised to limit global heating to 1.5°C above preindustrial levels, the world’s major banks have funneled 20 times more money to climate-polluting industries in the Global South than Global North governments have given those same countries to address the climate emergency.

That’s just one of the findings of How the Finance Flows: The Banks Fueling the Climate Crisis, an ActionAid report released Monday.

“This report names the biggest offenders in the banking world and calls on them to see that they are destroying the planet, while harming the present and future for their children,” Ugandan climate activist Vanessa Nakate wrote in the foreword. “It’s time to hold financial institutions to account, and demand that they end their funding of destructive activity.”

The report focuses on the financing of two major climate-heating industries in the 134 nations of the Global South: fossil fuels and industrial agriculture.

“People generally know that fossil fuels are the number one cause of greenhouse gas emissions. But what is less understood is that industrial agriculture is actually the second biggest cause of climate emissions,” Teresa Anderson, the global lead on climate justice at ActionAid International, said during a press briefing ahead of the report’s release.

This is because of the sector’s link to deforestation, as well as the emissions required to produce industrial fertilizers, she added.

In total, since the 2015 Paris agreement, banks have funded the largest Big Ag companies doing business in the Global South to the tune of $370 billion and the oil, gas, and coal sectors to the tune of $3.2 trillion.

“Global banks often make public declarations that they are addressing climate change, but the scale of their continued support of fossil fuels and industrial agriculture is simply staggering.”

The top three banks that invested the most in these sectors were the Industrial and Commercial Bank of China at $154.3 billion, China CITIC Bank at $134.7 billion, and the Bank of China at $125.9 billion. Citigroup came in fourth at $104.5 billion, followed by HSBC at $80.8 billion.

While China features prominently in the report as the world’s largest economy, Anderson noted that much of what it produces ends up purchased by consumers in the Global North.

The top three banks in the Americas funding big agriculture and fossil fuels were Citigroup, JPMorgan Chase, and Bank of America. While Citigroup was the leading regional funder of fossil fuels, JP Morgan Chase gave the most to industrial agriculture.

In Europe, the top funders after HSBC were BNP Paribas, Société Générale, and Barclays, while Mitsubishi UFJ Financial rounded out the top Asian funders.

Where is all that money going? When it comes to agriculture, the leading recipient was Bayer, which bought out Monsanto in 2018. Banks have given it $20.6 billion to do business in the Global South since 2016.

Much of the fossil fuel money went to China’s State Power Investment Corporation and other Chinese companies; commodities trader Trafigura; and the usual fossil fuel suspects like ExxonMobil, BP, Shell, Saudi Aramco, and Petrobras.

“This is absurd,” Anderson said of the findings. “Global banks often make public declarations that they are addressing climate change, but the scale of their continued support of fossil fuels and industrial agriculture is simply staggering.”

ActionAid called the report the “flagship” document of its Fund Our Future campaign to redirect global money from climate crisis causes to climate solutions. The report calls on banks to make good on their climate promises and stop funding fossil fuels and deforestation, as well as to put additional safeguards in place to protect the rights of local communities, raise the ambition of their goals to reach “real zero” emissions, and improve transparency and other measures to make sure the projects they fund are behaving ethically.

“This can be stopped,” Farah Kabir, the country director of ActionAid Bangladesh, said during the press briefing. “The banks cannot continue to fund fossil fuel industries and industrial agriculture.”

In addition, the report offers recommendations to Global North governments to ensure a just transition to a sustainable future for everyone. These included setting stricter regulations for the banking, fossil fuel, and agricultural industries as well as ending public subsidies for these sectors and channeling the money to positive solutions like renewable energy and agroecology.

However, the form that funds take when sent to the Global South makes a big difference, said ActionAid USA executive director Niranjali Amerasinghe. Instead of coming in the form of private loans, it needs to be in the form of public money.

“Providing more loans to countries that are already in significant debt distress is not going to support their transition to a climate-compatible future,” she said.

One reason that loans are counterproductive is that nations that accept them are forced to provide a return on investment, and currently the main industries that offer this are in fact fossil fuels and industrial agriculture.

In addition to public funds, debt forgiveness or restructuring and new taxes could also help these countries with their green transition. If companies like Exxon or Bayer doing business in the Global South “were taxed in an equitable way, that would allow those governments to raise public revenue that can then be used to support climate action,” Amerasinghe said.

In particular, the report emphasizes agroecology as a climate solution that should be funded in Global South countries.

“Climate change is real in Zambia.”

Mary Sakala, a frontline smallholder farmer from Zambia, spoke at the press briefing about how the climate crisis and current agricultural policy put a strain on her community.

“Climate change is real in Zambia,” she said, adding that it had brought flooding, droughts, pests, and diseases that meant that “families currently, as I’m speaking right now, sleep on an empty stomach.”

Sakala saw hope in agroecology, which would help with food security and resilience, and make farmers less dependent on the government and large companies.

“We need policies to allow [us] to conserve our environment in a cultural way, to help us eat our food,” Sakala said. “We want… every seed to be utilized and saved and shared in solidarity.”

And she said that the companies and governments of the Global North have a duty to help them get there.

“Those people who are continuing to pollute and let the climate change increase, those people need to pay us, because we are suffering from the things that others are doing,” she said.

Original article by OLIVIA ROSANE republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0). 

Continue Reading‘This Is Absurd’: Major Banks Continue to Fund Climate Chaos in Global South

Extinction Rebellion calls out HSBC’s Greenwash at AGM in Birmingham

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At 10:30am this morning, around fifty protesters descended on HSBC’s annual general meeting at the Eastside Rooms in Birmingham to call out the bank’s shameful climate policies. It comes as the bank announces soaring quarterly profits of $12.9 billion.

Members of Extinction Rebellion Midlands and Money Rebellion arrived with a bath of greenwash, while a group of ‘dirty scrubbers’ dressed in pinafores and headscarves offered to clean up the bank’s soiled image in return for cash. 

Inside the conference centre protesters brought the AGM to a standstill as they unfurled banners, sang songs, the dirty scrubbers reappeared with dramatic skits, and people repeatedly called out HSBC’s broken promises over its climate pledges, accusing them of ‘climate genocide’ and ‘lies’. Security eventually removed protesters after 45 minutes of disruption. 

HSBC has invested $145bn in fossil fuels since the Paris Agreement in 2016 and the bank’s climate pledges have been tarnished by a series of damaging exposes. 

In December, HSBC made a surprise announcement that it was updating its energy policy and would stop new investment in oil and gas fields in an apparent change of policy. However, it’s climate pledges to date have been revealed as mere greenwash. in January, it was revealed that HSBC had given energy giant RWE a secret $340m loan as bulldozed a village to expand a coal mine in Germany, just three months after the bank had pledged to stop financing new coal. Last October, investigators showed that HSBC’s $1 trillion investment in ‘sustainable financing’ and ‘green bonds’ was being used by fossil fuel companies to bankroll mines, pipelines, and oil rigs.[4] 

Questions have also been raised about the bank’s pledge to stop direct funding of fossil fuel projects, while continuing to indirectly fund fossil fuel companies like Saudi Aramco, ExxonMobil and Shell. The bank is also financially supporting ConocoPhillips, the company behind the controversial Alaskan oil drilling Willow project. Despite its various pledges HSBC invested a total of $11.074b in fossil fuels last year.

Andrew Taylor from Money Rebellion said: “HSBC continues to fund new devastating coal,oil and gas projects. These projects destroy the health and livelihoods of communities who live near them, and are fuelling climate chaos. We will use every tool in the box to stop HSBC and other banks from pursuing this deadly business plan – from disrupting their AGMs to building the biggest bank boycott in history.”

Continue ReadingExtinction Rebellion calls out HSBC’s Greenwash at AGM in Birmingham

HSBC’s secretive loan to a coal company bulldozing a village

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Original article from The Bureau of Investigative Journalism republished under Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

HSBC made a secretive multimillion-dollar loan to an energy company that is bulldozing a village in western Germany to expand a huge coal mine, just three months after the bank pledged to stop funding coal.

HSBC, which claims it is “helping to lead the transition to a more sustainable world”, approved the $340m deal with energy giant RWE after internal discussions in which senior figures at the bank recommended that its involvement should not be publicised.

Violent clashes broke out at the site of the mine on Wednesday as riot police tried to drag away protesters to make way for the bulldozers under the glare of the world’s media. Hundreds of environmental activists have set up camp in Lützerath, the last of several villages to be sacrificed for the 35 km2 Garzweiler mine, which is owned by RWE, one of Europe’s largest energy companies.

HSBC bankers raised concerns about the expansion of the mine and the demolition of the villages but ultimately greenlit the deal. The disclosure of the loan will mark a further blow to the bank, which has raised at least $2.4bn in so-called “sustainable finance” for companies worsening the climate crisis and recently had a series of adverts banned by UK regulators for greenwashing.

According to data from Refinitiv, RWE borrowed a total of $5.4bn in loans arranged by a group of 25 banks including HSBC, Barclays and Santander. All three have committed to aligning their financing and investments with net zero by 2050.

At COP27 last year the UN secretary general, António Guterres, said that it was reprehensible to use “bogus net-zero pledges” to cover up “messy” fossil fuel expansion. “It is rank deception,” he added. “This toxic cover-up could push our world over the climate cliff. The sham must end.”

HSBC told the Bureau: “Details of this [deal] and all its participating banks are in the public domain, as is normal. We have processes to ensure our financing aligns with our policies, which include an expectation on clients to produce and implement credible transition plans.”

Barclays declined to comment on the RWE loan but said it is phasing out financing of thermal coal mining and coal-fired power generation. Santander declined to comment.

Image: Mike Langridge 2008

‘We don’t want our name associated with it’

At the end of 2021, HSBC committed to withdraw financing from clients that are expanding the production of thermal coal and phase out funding for coal-fired power and thermal coal mining.

Bankers asked internally whether lending money to RWE would comply with this policy and raised concerns about RWE’s plans to demolish several villages. The Garzweiler mine produces 25m tonnes of lignite – the dirtiest form of coal – every year.

After several meetings, the sustainability and reputational risk department approved the deal but said that RWE should not publicise HSBC’s involvement.

An HSBC banker, who asked to remain anonymous, said of the deal: “We’re saying, ‘We don’t want our name to be associated with it, but here are the funds and please don’t tell anyone that we gave you the funds.’ I acknowledge that this approach is questionable.”

The deal was initially structured as a sustainability-linked loan, meaning its terms include a commitment from RWE that it will hit certain climate targets by 2025. But the penalty it would face for failing to do so is a tiny increase in the interest it pays on the loan. This would come to $86,700 a year for a company whose most recent annual revenues were $26bn.

Sustainability-linked loans are meant to encourage polluters to transition to more environmentally friendly operations, but companies that raise funds through the loans do not face any restrictions on how that money is used.

The HSBC banker said: “There is no guarantee that the [RWE loan] won’t be used to help pay a supplier, or pay salaries of contractors involved in the coal mine project.”

Protesters near Lützerath in January 2023. Photo: Lützi lebt/Unwisemonkeys CC BY-NC 2.0.

A condemned village

The vast Garzweiler open-cast mine has already swallowed 13 villages, according to Friends of the Earth Germany. Thousands of residents have been resettled and churches, schools and village halls have all been bulldozed to satisfy the voracious demand for energy in a heavily industrialised area.

Local residents and environmental activists across Germany have campaigned to protect another six neighbouring villages that were slated for demolition and appear to have had some success. RWE recently said that it would stop using coal in 2030 and so would drop its plans to raze five of the villages.

That just leaves Lützerath, where police are battling to evict hundreds of activists who have been living in abandoned buildings and makeshift treehouses for the past two and a half years. They have built a skate hall, farmed their own food and run workshops on climate justice.

Eckardt Heukamp was Lützerath’s last remaining resident until he moved out last year. “You saw how the church was torn down and dug up, how the villages have vanished,” he told the Times. “At some point you just say to yourself that it can’t keep going on like this, being subjugated and driven into a corner all the time.”

The showdown between the authorities and occupying activists escalated on Wednesday as riot police armed with batons moved in to evacuate the area, hauling out protesters and making arrests as fires burned in the streets of the village.

Just a few hundred metres away, one of the world’s largest land vehicles continues to carve away at the earth, bringing the edge of the mine ever closer to Lützerath.

Meaningless targets

In order to secure the loan, RWE committed to reducing its carbon emissions per unit of power generated, across all its energy sources. This means that, as long as it adds enough wind and solar power into the mix, the company could in fact increase its emissions from coal – and its planet-warming emissions overall.

It also committed to increasing the proportion of energy it generates from renewables and the amount it is investing in sustainable energy.

The penalty if RWE fails to meet all three targets is an increase in the interest it pays on the loan of less than 0.03 percentage points.

“It’s almost meaningless,” said Tariq Fancy, BlackRock’s former chief investment officer for sustainable investing. “Because the only thing that really changes behaviour in financial markets is when you change incentives. And you can’t change incentives with something so miniscule.”

Critics say RWE – which is Europe’s largest emitter of CO2 – could single-handedly stop Germany meeting its climate targets. Catharina Rieve of the German Institute for Economic Research said this will be the case if the company follows through with its plan to burn 280m tonnes of coal from the Garzweiler mine before 2030.

RWE told the Bureau it disputed this projection because the EU’s emissions trading system means that “if one company emits less, other companies elsewhere can emit more”.

The company added: “In the current energy crisis, ensuring security of supply is vital. At the same time, protecting the climate remains one of the key challenges of our time. RWE supports both. The company invests billions of euros into accelerating the energy transition.”

The HSBC banker said it was questionable to view a company as transitioning to net zero while it was expanding coal extraction, and that the bank’s attempts to challenge polluters on their transition plans was minimal.

HSBC decided the loan should not be classified as “sustainability-linked” internally, even though environmental targets remained part of the agreement. The bankers agreed it should not count towards HSBC’s target to contribute up to $1tn in sustainable finance by 2030 because of RWE’s plan to expand the Garzweiler mine and demolish several villages.

Barclays and Santander declined to comment on whether they are counting their parts of the RWE loan package towards their internal sustainable finance targets.

HSBC told the Bureau: “We have been clear we will finance energy companies who are taking an active role in transitioning to a net zero energy future, and we remain committed to this goal amid the double challenge of tackling climate change and an acute energy crisis in Europe.”

RWE is not the only company expanding fossil fuel production that has borrowed money under the guise of sustainable finance. Refinitiv data shows that Chrysaor – now part of the UK North Sea’s biggest producer of fossil fuels – raised $4.5bn with a sustainability-linked loan arranged by HSBC, Barclays, Lloyds, Natwest and a number of other banks.

One of the biggest oil producers in the US, Occidental Petroleum, raised $4bn, and the world’s biggest oil services provider Schlumberger raised $912m, also with sustainability-linked loans arranged by HSBC and other banks.

Tony Burdon, chief executive at Make My Money Matter, which campaigns for greener investments, said: “HSBC took an important first step in ceasing direct finance towards fossil fuel expansion projects. But as this report so clearly shows, they haven’t gone far enough.

“By continuing to provide sizeable corporate loans to companies involved in fossil fuel expansion such as RWE, HSBC is not just damaging the environment and displacing communities, they’re undermining their own climate targets.”

Lead image: Riot police stand in front of burning barricades as activists stage a protest in Lützerath. Credit: Bernd Lauter / Getty

Reporter: Josephine Moulds
Environment editor: Robert Soutar
Impact producer: Grace Murray
Global editor: James Ball
Editor: Meirion Jones
Production editors: Alex Hess and Frankie Goodway
Fact checker: Andrew Wasley

This reporting is funded by The Sunrise Project. None of our funders have any influence over the Bureau’s editorial decisions or output.

Original article from The Bureau of Investigative Journalism republished under Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Continue ReadingHSBC’s secretive loan to a coal company bulldozing a village

COP26 News review day 8

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Obama implores world leaders to ‘step up now’ to avert climate disaster

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They include executives from Shell, BP, Equinor, Chevron, Total, Gazprom and other major oil and gas companies, as well as multinational corporations such as McDonald’s, Bayer, Walmart, HSBC, PepsiCo, Nestlé and Microsoft.

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Wera Hobhouse is the Liberal Democrats’ justice spokesperson and MP for Bath.

To reach net zero, we need an end date for the use of fossil fuels. Yet, the Government is taking us backwards on tackling climate change. Any wonder when they are bankrolled by fossil fuel interests and climate sceptics? As long as we have a Government dominated by vested interests, the UK will make no progress on climate action. 

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Continue ReadingCOP26 News review day 8