Major bank faces backlash over decisions allegedly causing over $100 billion in damages: 'It is choosing profit over people'

ActionAid UK, which works with women and girls living in poverty, has announced that it will pull most of its accounts from banking giant HSBC.

Hannah Bond, co-CEO at ActionAid UK, told The Independent that "HSBC's investments show it is choosing profit over people and planet."

The NGO's joint investigation with consultancy Profundo linked HSBC's financing of dirty fuels and industrial agriculture to an estimated £128 billion ($172 billion) in climate-related damages.

Climate-related damages are the health, economic, social, and environmental costs associated with the consequences of rising global temperatures.

These damages can encompass everything from infrastructure and agricultural losses due to more intense extreme weather to the subsequent displacement, food insecurity, and disease spread.

They also include costs connected to the impacts of sea-level rise, land degradation, biodiversity loss, and other related factors.

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Why are HSBC's financing decisions concerning?

The scientific consensus is that human activities, especially the burning of coal, oil, and gas, are causing the Earth's climate to warm at an accelerated rate. Researchers have also linked pollution from dirty fuels to adverse health outcomes and millions of annual premature deaths.

ActionAid said it discovered that HSBC had put £153 billion (more than $205 billion) into oil and gas from 2021 to 2023, according to its investigation shared exclusively with The Independent. Many of the bank's projects were also having worrying impacts on communities already vulnerable to the effects of a warming climate.

In Patuakhali, a coastal town in Bangladesh, for example, an HSBC-financed oil-fired power plant has contaminated the air and water with black dust and industrial waste. Residents have reported that their fish stocks have declined, and their farmland has been destroyed.

"Water is life, but here, it has become poison," one street vendor told ActionAid.

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Another added: We breathe this in every day. Our children have constant coughs, but where can we go?"

While HSBC has said it remains committed to reducing harmful emissions by getting its portfolio to net zero by 2050, The Independent reported that it has not lived up to its pledge to stop funding companies increasing the production of coal — the dirtiest fuel.

On July 11, HSBC also became the first major bank in the United Kingdom to withdraw from the Net Zero Banking Alliance.

Bond told The Independent prior to HSBC's announcement about the alliance that ActionAid's decision to move the majority of its accounts didn't come lightly, as it occurred after "years of raising the alarm over [HSBC's] climate and human rights record."

"Moving our money is not just symbolic; it's a vital first step in challenging destructive financial systems and standing firmly by our values," Bond said.

ActionAid is now doing most of its banking with Lloyds Banking Group. While Zahra Hdidou, one of the authors of the report, acknowledged to The Independent that Lloyds is not perfect, she said it has a "better track record than HSBC."

For one, it has consistently supported policies that would direct financing toward clean energy projects, according to InfluenceMap analysis.

While transitioning to cleaner infrastructure will require continued ingenuity and substantial monetary investments, the cost of keeping the status quo would be much higher in the long run.

A study by the Institute and Faculty of Actuaries estimated the global economy could experience a 50% loss in GDP between 2070 and 2090 if no action is taken.