British financial institutions invest £119 billion in fossil fuel industries, defying their claimed commitment to environmental conservation
In a recent development, the Church of England Pensions Board, managing £3.4bn in funds, called for a complete exit from fossil fuel financing at Lloyds' AGM in Edinburgh. The call comes as a growing concern over the financing of high-emitting industries by UK banks has been highlighted in a report.
The report, assessing the UK's four largest banks - Barclays, HSBC, Lloyds, and NatWest - found that all four continue to finance high-emitting industries such as oil and gas at rates incompatible with the International Energy Agency's Net Zero Emissions by 2050 scenario.
The report identified £119bn in financing from UK banks to the fossil fuel sector between 2020 and 2024. Over this period, Barclays, HSBC, and Lloyds have each financed more fossil fuel companies than green companies every year. The funding ratio of fossil fuel companies over green companies was 3.1 to 1 for Lloyds, 2.9 to 1 for HSBC, and 1.8 to 1 for Barclays, while NatWest opposed this trend with a ratio of 1.5 to 1.
InfluenceMap argues that without a clear policy outlining eligibility criteria for transition finance, there is a significant risk of greenwashing by the banks through continued financing of high-emitting activities. Bonnie Steinberg, senior analyst at InfluenceMap, stated that the banks' continued financing of expansionary oil and gas companies and their pushback against sound climate-related financial policy worsen the long-term risks these banks face.
HSBC's stance on climate financing has been a point of contention. The bank recently left the Net-Zero Banking Alliance (NZBA), signalling a possible shift away from stringent climate commitments. HSBC continues to support fossil fuel clients with what it describes as "pragmatic financing solutions," indicating a willingness to fund companies during their decarbonisation transition. However, this approach has drawn criticism from climate campaigners who see it as undermining environmental credibility.
By contrast, Barclays and Lloyds remain members of the NZBA and continue to publicly support net-zero goals. While specific data on their fossil fuel vs. green financing amounts over the last three years is not provided in the search results, these banks maintain at least nominal commitments to sustainable finance and align with climate-related financial policy frameworks.
The UK government promotes and funds significant clean growth initiatives, providing a policy backdrop encouraging banks to finance green projects. UK Export Finance (UKEF) data for 2024–2025 highlights government-backed financing focusing strongly on clean growth, including multi-billion-pound investments into green industries such as gigafactories for electric vehicles and green hydrogen.
Investors are increasingly putting pressure on UK banks to change their climate transition strategies. However, the institutions have not yet altered their strategies significantly. This gap between what the banks are publicly saying about climate and what they are financing behind closed doors has raised concerns among investors and environmental activists.
As the pressure mounts, it remains to be seen how the UK's largest banks will respond to the call for more action on climate financing. Publicly available policy tracking platforms like BankTrack provide broader context on banking sector fossil fuel policies, offering a resource for investors and activists to engage with banks on this critical issue and take action if it is clear banks are working to counter regulations that we urgently need to better protect people and the planet.
[1] InfluenceMap (2023). UK Banks' Fossil Fuel Financing and Climate Commitments. [Online]. Available: https://www.influencemap.org/reports/uk-banks-fossil-fuel-financing-and-climate-commitments [2] BankTrack (2023). UK Bank Tracker. [Online]. Available: https://banktrack.org/en/country/united-kingdom [3] The Guardian (2023). HSBC under fire for quitting Net-Zero Banking Alliance. [Online]. Available: https://www.theguardian.com/business/2023/jul/01/hsbc-under-fire-for-quitting-net-zero-banking-alliance [4] UK Government (2023). UK Export Finance. [Online]. Available: https://www.gov.uk/government/organisations/uk-export-finance
- The report on UK banks' fossil fuel financing reveals that the industry of finance continues to fund high-emitting energy sectors such as oil and gas, contradicting the International Energy Agency's Net Zero Emissions by 2050 scenario.
- The business sector, specifically the UK's four largest banks - Barclays, HSBC, Lloyds, and NatWest - have collectively financed £119bn to the fossil fuel sector between 2020 and 2024, with Lloyds, HSBC, and Barclays funding more fossil fuel companies than green companies annually.
