HSBC Holdings PLC (LSE:HSBA), which has been one of the biggest global backers of fossil fuel projects in recent years, said it will phase out investment in oil & gas as part of a new commitment to supporting the transition to net zero.
As part of the new energy policy, the FTSE 100-listed lender said: "we will no longer provide new lending or capital markets finance for the specific purpose of projects pertaining to new oil and gas fields and related infrastructure when the primary use is in conjunction with new fields".
It will continue to provide finance or advisory services to energy sector clients "at the corporate level, where clients’ transition plans are consistent with our 2030 portfolio-level targets and net zero by 2050 commitment".
In other words, it could provide finance to an oil company that says it aims to reach net zero in around three decades.
Furthermore, it will continue to provide finance to "maintain supplies of oil and gas in line with current and future declining global oil and gas demand", given the ongoing need for energy and the crisis sparked by the sanctions on Russia after its invasion of Ukraine.
This will be combined with a planned acceleration of its activities in renewable energy and clean infrastructure, though it did not change its previously stated "ambition" to provide between US$750bn and US$1trn of sustainable finance and investment by 2030.
HSBC said its new policy will see it push energy clients to adopt more stringent methane mitigation standards and investment in carbon abatement technologies.
An updated thermal coal phase-out policy also now includes targets to "reduce absolute on-balance sheet financed emissions from thermal coal mining by 70% by 2030", and by 70% for thermal coal-fired power production.
The updated thermal coal phase-out policy also prohibits finance for new metallurgical coal mines.