HSBC to stop funding new oil and gas projects: report

They will continue to finance energy companies at a corporate level to help them transition.

HSBC will stop funding new oil and gas fields as part of a wider update of its sector policy, the bank stated.

The bank said that it would continue to finance energy companies at the corporate level to help them overhaul their businesses and drive development of cleaner energy sources, and would assess their strategic plans annually.

Activist groups that have been critical of HSBC in recent years mostly hailed the move as a keenly awaited update that will drive companies towards a cleaner future.

Covering everything from biomass projects to hydrogen, nuclear and thermal coal, the policy was aimed at driving progress across regions with different energy systems, Celine Herweijer, HSBC's Chief Sustainability Officer, told Reuters.

ALSO READ: HSBC sells Canadian banking operations to Royal Bank of Canada for $10.1b

"It's not no new fossil fuel investment as of tomorrow. The existing fossil fuel energy system needs to exist hand-in-hand with the growing clean energy system," Herweijer said.

"The world cannot get to a net-zero energy future without energy companies being at the heart of the transition,” she added.

Read more from Reuters.