The UK Government has committed to achieving net-zero emissions by 2050, yet UK financial institutions like HSBC continue to fund industries that exacerbate the climate crisis and violate human rights. Notably, HSBC’s financing of fossil fuel projects and industrial agriculture continues to drive climate destruction, affecting communities across the globe, particularly women and girls in the Global South who bear the brunt of these impacts.
In a new report, ActionAid UK investigates the costs to people and the planet resulting from HSBC’s financing of these climate-harmful industries. In the period 2021-2023, the report finds
that HSBC provided £153 billion in financial flows to fossil fuel and industrial agriculture sectors. As a result of these financial flows, HSBC has generated 357 million tons of Carbon dioxide equivalent (CO2e). The societal costs of these emissions – using the Societal Costs of Carbon methodology – are calculated at £128 billion in climate damages, equivalent to three times HSBC’s accumulated net profit in this period.
HSBC’s financial flows to companies active in the Global South is also linked to human rights and environmental harm. Stories of harm emerge from communities, particularly women and girls, impacted by extractive activities in Bangladesh, Brazil and Tanzania. These impacts vary from case to case but taken together include deforestation, land grabbing, displacement of communities, risks to loss of biodiversity, violations of rights of indigenous people and local communities, gender-based violence, and pollution leading to health issues.
HSBC’s policies on fossil fuels, industrial agriculture, and human rights are insufficient in addressing the climate crisis and the direct impacts of these sectors. In addition, the UK’s regulatory framework is insufficient, fragmented, and voluntary, failing to address the systemic risks posed by financial flows to high-emission sectors. These systemic risks include severe environmental degradation, human rights violations, and economic instability that can affect entire regions, with disproportionate impacts for communities in the Global South who are least responsible for climate change.
The UK Government must take decisive action to regulate financial institutions if it is to fulfil its own climate goals and human rights obligations, by:
- Prohibiting financing of fossil fuel expansion projects and harmful industrial agriculture
- Introducing a gender-responsive Business, Human Rights and Environment Act (BHREA) to mandate UK companies – including financial institutions – to conduct robust due diligence to identify. prevent and address environmental and human rights abuses
- Making banks pay their fair share for the damages they cause
- Establishing and implementing a rights-based, gender responsive UK Green Taxonomy
- Addressing harmful industrial agriculture in sustainable finance regulations
- Introducing robust disclosure and reporting requirements for greater transparency
Posted by: CJC Team | Tagged as: Partner resource
