HSBC is facing criticism from investors and climate advocates after helping raise $1 billion for Glencore, a major coal producer, despite the bank's public pledge to stop financing coal expansion.
What's happening?
HSBC struck an investment deal with Glencore in 2023, a stark contrast to its 2021 commitment to cease funding companies increasing their coal output. According to a Bureau of Investigative Journalism report, Glencore has increased its coal production from 94 million tons in 2021 to 106 million tons in 2023.
Glencore owns two majorly polluting mines: the Tweefontein mine in South Africa and the Cerrejón mine in Colombia.
The Bureau of Investigative Journalism reports that the latter has been tied to a "litany of human rights abuses and environmental harms." These mines have been linked to severe pollution, water scarcity, and health problems like respiratory issues and blurred vision among nearby residents — impacts documented by the U.N. and local courts. Despite this, Glencore plans to continue coal mining at some sites until at least 2034.
Major HSBC investors have condemned the deal, calling it a clear violation of HSBC's own climate policy. Some accused the bank of "bulldozing through" its commitments and undermining its credibility with both shareholders and customers.
"Despite [the bank's] own 'green' rhetoric and what they would like the public to see and think about their ethics, HSBC is clearly falling short, neglecting its responsibility to the planet while keeping its customers in the dark about the true impact of its financing," Zahra Hdidou, senior climate and resilience advisor at non-profit ActionAid, told the Bureau of Investigative Journalism.
HSBC recently rolled back on its broader climate pledge and abandoned key climate targets, including introducing exceptions to its coal policy. The bank also recently removed its chief sustainability officer from its board. In 2023 alone, HSBC reportedly helped raise nearly $17 billion for coal-linked companies globally.
In a statement to the Bureau of Investigative Journalism, HSBC defended its actions, claiming it follows "a clear set of sustainability risk policies" and remains committed to reaching net zero by 2050, although it declined to comment on specific client relationships.
Why is HSBC's funding of Glencore important?
HSBC's support of Glencore highlights a growing disconnect between financial institutions' climate pledges and their actual practices. Quietly backing polluting industries while publicly claiming to support climate action not only delays the transition to clean energy but also betrays public trust. Instances like this can be considered greenwashing — or promoting an eco-friendly image while continuing harmful practices.
Abandoning coal for cleaner sources of energy — like solar, wind, and geothermal — is vital for protecting the environment, global water systems, and human health. Banks play a powerful role in shaping the future of clean energy. When banks withhold capital from polluting industries, they help shift momentum toward these renewable energy sources. But when institutions like HSBC walk back on their commitments, it undermines global sustainability efforts — and misleads customers in the process. Without transparency and accountability, climate pledges from major institutions risk becoming little more than hollow promises.
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Definitely 👍 Glencore told the Bureau of Investigative Journalism that it complies with international standards and provides resources to affected communities. Glencore is also notably working on some climate-conscious projects, including copper recycling.
What's being done about financial institution greenwashing?
HSBC isn't alone in its covert support of coal. Despite growing public pressure to stop funding polluting industries, many banks continue to quietly back coal and other harmful industries. According to the Bureau of Investigative Journalism, Barclays and Santander also appeared to have broken their climate pledges in 2023.
Holding banks accountable for their climate pledges and investments is the only way to prevent these pledges from becoming mere greenwashing. Many global governments are looking to regulate financial institutions, and some institutions now face legal challenges over misleading climate claims and inconsistent policies. Notably, the U.S. Federal Reserve Bank recently refused to agree to a plan requiring lenders to disclose their climate risks.
Investigations by environmental nonprofits and journalistic organizations, like this report by the Bureau of Investigative Journalism, are crucial to exposing gaps between green claims and funding realities.
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