Banks pour trillions into fossil fuel projects for global south - report

The report from ActionAid International and Profundo has found that banks, including HSBC and Barclays, have put $3.2tn towards the expansion of fossil fuels since the 2015 Paris Agreement, with $370 billion being channelled into agribusinesses.

The report - How the Finance Flows - also found that funding from UK high street banks is causing human rights violations in 134 countries across the global south. 

HSBC has provided over $80bn (£62bn) in financing toward fossil fuels and industrial agriculture during this period. The report also found that Barclays has provided $41.1bn (£32.15bn) in financing for both over the same period. 

In a statement, Hannah Bond, deputy director of advocacy at ActionAid UK, said: "UK banks are continuing to underwrite climate chaos. From Brazil to Ghana, vast sums of money from British banks are being poured directly into countries where we work, causing mass devastation to entire communities. Despite contributing less than two per cent to global emissions, countries across the global south are bearing the brunt of decisions being made in boardrooms far away.

"It’s time these banks faced up to the chaos they are causing and end their investments in fossil fuels and agribusiness now."

The report found HSBC is providing funding to fossil fuel companies and agribusinesses in 134 countries across the global south.

ActionAid is active in Ghana, where finance from HSBC to the Offshore Cape Three Points project is said to have displaced Indigenous communities, decreased food and livelihood resources for local fishing communities, and resulted in air pollution and seawater degradation.  

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The report found that Barclays is the largest funder of TotalEnergies in the global south, providing $2.1bn since 2016. The French oil and gas giant is behind several projects, including the East Africa Crude Oil Pipeline (EACOP) and the development of Mozambique LNG, which has displaced hundreds of families without adequate compensation. 

The report found that since the Paris Agreement, banks have provided 20 times more financing to fossil fuels and agriculture activities in the global south than global north governments have provided as climate finance to countries on the front lines of the climate crisis. 

ActionAid’s report calls on banks to divert funding away from fossil fuels and agribusinesses and towards sustainable solutions that protect the environment and human rights. 

Bond said: “Banks are only interested in lining their pockets while the planet burns. Our future is on the line – banks must rapidly phase out all financing of all fossil fuel and industrial agriculture."

For its part, HSBC said that by 2030 (from a 2019 baseline) it is targeting a 34 per cent reduction in absolute financed emissions for the oil and gas sector, 0.14 Mt CO2e/TWh financed emissions for the power and utilities sector, and introducing a 70 per cent reduction in absolute financed emissions for thermal coal-fired power and for thermal coal mining (on-balance sheet targets) from a 2020 baseline.

Barclays said it has bettered its 2018 target to deliver £150bn of social and environmental financing by 2025 and is on track to deliver £100bn of green finance ahead of its 2030 target.

“Barclays continues to focus on aligning its financing with the goals and timelines of the Paris Agreement, setting targets to reduce financed emissions for high emitting sectors,” the bank states on its website.