HSBC and NatWest, two major UK high street banks have reportedly been accused of continuing to finance fossil fuel expansion in the North Sea despite signing a pledge to align their activities with the net zero climate goal.
HSBC and NatWest are being accused of providing tens of millions in finance to Ithaca Energy, a British oil and gas company that is playing a key role in plans to exploit the controversial Rosebank oilfield north-west of the Shetland Islands. Another high street bank, Lloyds, also provided finance but has since sold down the debt.
According to reports, a group of more than 80 organisations including Global Witness, Greenpeace and the Rainforest Action Network have written to the banks’ chief executives calling on them to cease funding Ithaca and to end their relationship with the company.
The UK government approved the exploitation of Rosebank in September last year. The UK’s largest untapped field, it is estimated to contain the equivalent of 500m barrels of oil which, if burned in its entirety, would produce 200m tonnes of CO2.
Ithaca Energy, which already has stakes in six of the 10 largest producing fields in the North Sea, is investing billions in Rosebank’s development in the hopes of beginning production in 2026, according to oil industry press reports. Activists describe it as a “pure play” fossil fuel company, with no publicly stated plans to diversify into green energy production.
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HSBC, Lloyds and NatWest are members of the Net Zero Banking Alliance, which requires them to align the greenhouse gas emissions arising from their lending and investment portfolios to net zero by 2050 or sooner, and all have publicly pledged to stop directly financing new oil and gas projects.
But according to the Banking on Climate Chaos 2023 report, relating to finance between 2016 and 2022, Lloyds provided $78m (£61m), HSBC provided $60m (£47.0m) and NatWest provided $78m (£61m) to Ithaca. It is also understood that Lloyds has since sold down its debt facilities with the company and has no outstanding lending with Ithaca.
The letter, which was sent on Wednesday, calls on the three banks, and nine others identified as financing Ithaca, to press the company to end its development of Rosebank, and if it does not, to refuse any further financing for it. It also calls on them to adopt a formal policy requiring clients to have a transition plan aligned with the Paris climate accords.
“Any future financing, including advisory services, to Ithaca Energy would expose your bank to significant risks if the company moves forward with the Rosebank field and other expansion projects,” the letter says. “These include risks to the bank’s reputation, possible legal and regulatory claims, as well as potential impact on investor expectations.”
Story was adapted from the Guardian.
