Bill McKibben — HSBC Breaks With Other Banks On Fossil Fuel Financing

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Bill McKibben is arguably the most powerful voice for taking climate change seriously of all the people in the blogosphere today — more than  Greta Thunberg or António Guterres. If you are not a subscriber to his Crucial Years blog, you are missing out on a great source of information about the fight to preserve the Earth as a place where humans can continue to thrive. In his latest blog post, he reveals how HSBC Bank — Europe’s biggest banking institution by total assets — announced this week that it would no longer provide financing for new oil and gas fields.

McKibben points out that this new commitment by HSBC is something less than a full pull-back from financing fossil fuel activities. It will continue financing things like LNG terminals, for example. But he says the pledge sets a new baseline that will be used to make other banks uncomfortable. In particular, he  says Chase, Citi, Wells Fargo, and Bank of America — the four biggest lenders to the fossil fuel industry — lost a lot of cover because of the HSBC announcement.

“It’s no longer possible for them to pretend that this kind of lending is business as usual. Scientists have said continued fossil fuel expansion will break the back of the climate system. The International Energy Agency has said this kind of financing had to stop in 2021 if we were to meet the Paris climate targets and now one of the brotherhood of global megabanks has broken ranks and gone along,” McKibben writes.

The fossil fuel industry can see this threat coming, Bill McKibben says. That’s why they have unleashed the treasurers of red states to threaten the banks with the loss of their business if they take this step. Happily, blue city and state treasurers have more money, and they’re rising to the challenge. “I can tell simply by the outpouring of vitriol from climate deniers on Twitter today that HSBC touched a nerve,” McKibben says. One twit told him on Twitter, “Blood is on your hands super stupid syphilletic gang f*ck reject.” Such is the level of conversation typified by Elon Musk’s new citadel of “free speech.”

But the real anger is doubtless in the C-suites of those big four American banks, McKibben says. “I remember years ago, early in the fossil fuel divestment campaign, when I was sitting with the president of a big college (along the Charles, and ivied). I started listing the names of the noble but small colleges that had acted on principle early on to divest, and he listened for a minute and then hissed ‘you haven’t gotten a single big research university.'”

That was true at the time, but within the next few years Oxford, Cambridge, the University of California, the University of Michigan, Columbia, and others had divested. It was only a matter of time before that ivied institution along the Charles followed suit. That’s where the big banks find themselves today. “Amalgamated Bank and Beneficial State — two of the first banks to stop lending money to the fossil fuel industry — deserve huge credit for doing the right thing but they’re not fat cats. HSBC undeniably is. It’s got $4 billion in assets, it’s #13 in the world in fossil fuel lending. It’s in the club.” McKibben writes.

32123 — Climate Action For All

HSBC is not a particularly virtuous enterprise, McKibben says. It began in Hong Kong in 1865 with an early specialty in the opium trade. Earlier this year it was censured for lying about its climate change efforts in its ads. In between, there has been every flavor of scandal that big time capitalism can produce.  But the activists who have been pushing them for years to take this step have won the world a huge victory.

But McKibben does more than just write about his angst over a warming planet. He is always thinking up new ways of getting his message across. The latest gambit is something called 32123. What’s that? It stands for March 21, 2023. “It will be the biggest day yet in the fight to shut off the flow of cash from Big Banking to Big Oil, a fight that may be the most important in the effort to keep the planet habitable,” he wrote in another blog post on December 5.

“On that day, people will be fanning out across the country to demonstrate. They will be cutting up their credit cards from Chase and Citi and Wells Fargo and Bank of America, and doing it where they’ll be noticed: underwater on Florida’s dying coral reefs, against California’s fire-scarred forests. There will be protests outside bank branches, and likely inside them too: this activist phase of the banking campaign was just about to break in the spring of 2022 when covid intervened. Now it’s on.”

Because of that delay, McKibben and other fossil fuel opponents have learned more about those four big banks and their activities. And it’s all bad, he says.

1. These four big banks are the well that keeps pumping money for fossil fuel expansion. The Banking on Climate Chaos report makes it clear, year after year, that they continue to pump hundreds of billions of dollars annually down a hole that climate scientists have said, unequivocally, we must be plugging. Some of that money—particularly outrageously—has gone to support Putin’s hydrocarbon companies; all of it is is serving to damage the poorest and most vulnerable people on earth. The most up to date numbers come from the Rainforest Action Network and its invaluable new report, Wall Street’s Dirtiest Secret. Read it and weep. (And then sign up to fight).
2. We can now quantify exactly how much damage money in that banking system is doing. This year’s report from Bank Forward and its partners shows that if you have $125,000 in the mainstream banking system, where it’s being lent out for new pipelines and such, it’s producing more carbon than all the heating, cooling, driving, flying and cooking in the average American life. For big companies, their cash on hand produces more carbon than their warehouses or delivery trucks; for American cities, their bank accounts produce more carbon than their subways and buses. America’s megabanks are literally a third of the money flow to the people wrecking our climate.
3. And we know now that these banks are shameless greenwashers. A year ago in Glasgow they all trumpeted their virtue as they signed up for the “Financial Alliance for Net Zero.” But this year, when the rulemaking began to make those pledges really matter, the big American banks balked and threatened to pull out. So the rules were changed to let them keep on lending.

“No one is demanding an end to banking for fossil fuel companies. For at least a few more years, thanks to three decades of Big Oil intransigence, Exxon and its ilk will be supplying needed energy, and so they will need banking services. But it’s the expansion of the fossil fuel enterprise that must end. That’s it — the whole ask is that these big banks drop the minuscule percentage of their deal-making related to expanding the size of the fossil fuel industry.

“Groups of all kinds will be participating in this day of action — first proposed by Third Act, where we organize people over the age of 60, it’s found widespread support from all ages and all corners, everyone from the Hip Hop Caucus to the Sierra Club, and from 1000 Grandmothers to 350.org. It’s a first step, not a last one: the point is to raise enough awareness that the campaign grows to include big companies that can’t meet their net zero pledges as long as their banks are dirty, and the treasurers of blue states and cities who need to at least match the pressure coming from their peers in the oil patch.

“You don’t need to travel to participate: these banks have helpfully put 30,000 of their branches in the highest-traffic retail locations across America. Trust me, there’s one near you. And you don’t need to have moved your mortgage—organizers know it’s hard work to find new credit cards or to move accounts, so many participants will be there simply to put pressure on these institutions to change.

“That pressure won’t work immediately: these banks are, quite literally, the capital in capitalism. But they’re not invulnerable, not if we stand up. Palindromically!”

The Takeaway

“Never underestimate the power of a small group of committed people to change the world. In fact, it is the only thing that ever has,” said Margaret Mead. Do you want to be part of that small group? We have helpfully provided links above to several organizations that would love to help you get involved. The time is short and the need is great. Please do whatever you can to impress on these megabanks that funding the death of our planet is not OK. Thank you.