£128 billion in climate damage tied to HSBC financing
A new report by ActionAid and research group Profundo, has revealed that HSBC is responsible for fueling climate disasters and people suffering, through its financing of fossil fuels and industrial agriculture, the two largest sectors with the largest contribution to the climate crisis.
The report, ‘Who Pays the Price? The Cost of HSBC’s Climate Damages’ investigated the costs to people and planet resulting from the bank’s financing of fossil fuels, responsible for more than three-quarters of global emissions, and industrial agriculture, which accounts for around one-fifth of greenhouse gas emissions globally.
Headquartered in the UK, HSBC was identified by ActionAid’s 2023 ‘How the Finance Flows,’ report as the largest overall financier of agribusiness and the largest European financier of fossil fuels in the Global South, and the new report builds on the findings of the previous report by going further to quantify and evidence the climate damages caused by the bank’s financial flows.
It quantifies the climate damage costs of the emissions generated by these sectors as a result of HSBC’s financing, as well as examining the localized impacts on communities of the industrial agriculture and fossil fuel extraction activities that HSBC funds, whether via direct financing of specific projects or general loans to and investments in the relevant companies.
The findings are based on established models, including the Social Cost of Carbon (SCC), an approach that estimates the long-term economic, environmental, and social damage caused by carbon emissions.
Gaps in HSBC’s green promises
The report highlights the gap between HSBC’s green pledges and its actual business practices. While the bank publicly commits to sustainability, its financing choices tell a different story.
According to the report, the bank’s financing of fossil fuels and industrial agriculture from 2021 to 2023, exposed the planet to a shocking 356.8 million tonnes of carbon emissions, roughly, the equivalent of 10 African countries’ emissions for a whole year.
These emissions have been directly linked to extreme weather events such as droughts, floods, and food insecurity. The economic fallout from these emissions is staggering, with the report estimating a climate damage cost of £128 billion.
Even more concerning, the report points out that up to 80 percent of HSBC’s emissions have gone undisclosed, masking the true scale of its environmental impact.
Lives on the frontline
The report draws on powerful firsthand accounts from communities in Bangladesh, Tanzania, and Brazil, where ActionAid works. From water shortages in Bangladesh to the displacement and inadequate compensation of communities in Tanzania, HSBC-linked projects are hitting communities hard.
Of the £153 billion HSBC poured into polluting industries during the period, £77 billion was linked to companies whose projects have been associated with documented environmental and social harm.
In coastal Patuakhali, Bangladesh, for example, communities living near the HSBC-financed United Payra Power oil-fired plant are experiencing the fallout of toxic pollution. The plant burns heavy fuel oil, releasing black dust and industrial waste into the air and waterways. According to community members, water sources, including a local river, have been contaminated, collapsing fish stocks and destroying farmland.
“Water is life, but here it has become poison,” one street vendor interviewed, told researchers.
The water crisis is particularly punishing for women and girls, who traditionally bear the responsibility of collecting household water. With clean sources drying up, they are being forced to travel long distances, often risking their safety and increasing their exposure to gender-based violence.
Restricted access to clean water is also undermining menstrual hygiene and reproductive health, pushing women to resort to unsafe practices that escalate the risk of urinary infections and gynecological problems. For adolescent girls, the lack of sanitary facilities means missing school during menstruation, deepening long-term educational and economic disparities.
Families living close to the plant are also battling a wave of health problems, including chronic coughing, skin conditions, and anxiety. One woman described waking each morning to find her home coated in black dust.
“We breathe this in every day. Our children have constant coughs, but where can we go? This is our home,” she said.
Enough is enough
In response to the concerning findings of the report, ActionAid is cutting ties with HSBC, moving most of its accounts elsewhere after years of raising concerns over the bank’s climate and human rights record alongside recent delays to the bank’s net zero plans.
Zahra Hdidou, Senior Resilience and Climate Advisor at ActionAid UK, condemns the bank’s role in exacerbating the climate crisis.
“It is ludicrous that at a time when the climate crisis is wreaking devastating havoc on people’s lives, particularly in the Global South, banks are spending billions making the situation worse. And what is even more shocking is that they are being allowed to get away with it,” Hdidou says.
Call for global financial accountability
This report adds to the growing pressure on financial institutions to align their portfolios with climate goals and prioritize the rights and well-being of the communities most affected by their decisions.
And Hdidou stresses the need for banks worldwide to halt financing of harmful sectors to protect people.
“We are calling on banks across the world to stop projects and corporate financing for all new fossil fuel expansion activities, and rapidly phase out financing of all other fossil fuel and harmful industrial agriculture activities. People’s lives are on the line,” Hdidou says.
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