Study Reveals UK Banks Invest £75bn in Climate-Damaging ‘Carbon Bombs’—What You Need to Know

Banks in London have invested over $100 billion (£75 billion) in companies linked to massive fossil fuel projects known as “carbon bombs.” These projects are expected to significantly increase carbon emissions, jeopardizing global climate goals.

A recent study reveals that nine London-based banks, including HSBC, NatWest, Barclays, and Lloyds, funded at least 117 of these projects in 28 countries from 2016 to 2023. If these projects proceed, they could produce about 420 billion tonnes of carbon emissions, more than ten years of current global CO2 emissions.

Fatima Eisam-Eldeen from the Leave It in the Ground Initiative stated, “Despite the UK’s ambitious climate plans, it’s shocking to see such financial support for destructive projects.” She believes that real climate leadership requires holding banks accountable and stopping funding for initiatives that worsen the crisis.

The Guardian reported that major fossil fuel companies are quietly advancing numerous projects that threaten climate progress. Countries like the US, Saudi Arabia, Canada, Russia, and China have the highest number of these projects. However, the UK is still a central financial hub for these ventures, contributing to over 25% of global carbon bombs.

Lucie Pinson from Reclaim Finance emphasized that UK banks are leading the charge in financing fossil fuel growth. She urged these banks to decide whether they want to support an unsustainable future or join the push for environmental transformation.

The report highlights that banks often fund entire companies rather than individual projects, making their financial contributions critical to the continuation of harmful initiatives.

HSBC is a major player, backing companies involved in 104 carbon bomb projects, which could emit up to 392 billion tonnes of carbon dioxide. In terms of support, Standard Chartered follows with 75 projects, Barclays with 62, Lloyds with 26, and NatWest with 20.

While some banks declined to comment, others defended their financing choices. A Barclays spokesperson stated that they offer a wide range of financing across the energy sector, aiming to support a transition to low-carbon alternatives.

Despite funding fossil fuels, banks like NatWest claim their lending to oil and gas is minimal, representing under 0.7% of all financing activities. However, many critics argue this is not enough in the face of climate emergency.

This ongoing debate touches on broader issues of economic growth versus sustainability. Advocates continue to call for more effective regulation and a more sustainable approach to finance.

For more insights, you can refer to the original study by the Leave It in the Ground Initiative here.

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