HSBC’s secretive loan to a coal company bulldozing a village

Original article from The Bureau of Investigative Journalism republished under Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

HSBC made a secretive multimillion-dollar loan to an energy company that is bulldozing a village in western Germany to expand a huge coal mine, just three months after the bank pledged to stop funding coal.

HSBC, which claims it is “helping to lead the transition to a more sustainable world”, approved the $340m deal with energy giant RWE after internal discussions in which senior figures at the bank recommended that its involvement should not be publicised.

Violent clashes broke out at the site of the mine on Wednesday as riot police tried to drag away protesters to make way for the bulldozers under the glare of the world’s media. Hundreds of environmental activists have set up camp in Lützerath, the last of several villages to be sacrificed for the 35 km2 Garzweiler mine, which is owned by RWE, one of Europe’s largest energy companies.

HSBC bankers raised concerns about the expansion of the mine and the demolition of the villages but ultimately greenlit the deal. The disclosure of the loan will mark a further blow to the bank, which has raised at least $2.4bn in so-called “sustainable finance” for companies worsening the climate crisis and recently had a series of adverts banned by UK regulators for greenwashing.

According to data from Refinitiv, RWE borrowed a total of $5.4bn in loans arranged by a group of 25 banks including HSBC, Barclays and Santander. All three have committed to aligning their financing and investments with net zero by 2050.

At COP27 last year the UN secretary general, António Guterres, said that it was reprehensible to use “bogus net-zero pledges” to cover up “messy” fossil fuel expansion. “It is rank deception,” he added. “This toxic cover-up could push our world over the climate cliff. The sham must end.”

HSBC told the Bureau: “Details of this [deal] and all its participating banks are in the public domain, as is normal. We have processes to ensure our financing aligns with our policies, which include an expectation on clients to produce and implement credible transition plans.”

Barclays declined to comment on the RWE loan but said it is phasing out financing of thermal coal mining and coal-fired power generation. Santander declined to comment.

Image: Mike Langridge 2008

‘We don’t want our name associated with it’

At the end of 2021, HSBC committed to withdraw financing from clients that are expanding the production of thermal coal and phase out funding for coal-fired power and thermal coal mining.

Bankers asked internally whether lending money to RWE would comply with this policy and raised concerns about RWE’s plans to demolish several villages. The Garzweiler mine produces 25m tonnes of lignite – the dirtiest form of coal – every year.

After several meetings, the sustainability and reputational risk department approved the deal but said that RWE should not publicise HSBC’s involvement.

An HSBC banker, who asked to remain anonymous, said of the deal: “We’re saying, ‘We don’t want our name to be associated with it, but here are the funds and please don’t tell anyone that we gave you the funds.’ I acknowledge that this approach is questionable.”

The deal was initially structured as a sustainability-linked loan, meaning its terms include a commitment from RWE that it will hit certain climate targets by 2025. But the penalty it would face for failing to do so is a tiny increase in the interest it pays on the loan. This would come to $86,700 a year for a company whose most recent annual revenues were $26bn.

Sustainability-linked loans are meant to encourage polluters to transition to more environmentally friendly operations, but companies that raise funds through the loans do not face any restrictions on how that money is used.

The HSBC banker said: “There is no guarantee that the [RWE loan] won’t be used to help pay a supplier, or pay salaries of contractors involved in the coal mine project.”

Protesters near Lützerath in January 2023. Photo: Lützi lebt/Unwisemonkeys CC BY-NC 2.0.

A condemned village

The vast Garzweiler open-cast mine has already swallowed 13 villages, according to Friends of the Earth Germany. Thousands of residents have been resettled and churches, schools and village halls have all been bulldozed to satisfy the voracious demand for energy in a heavily industrialised area.

Local residents and environmental activists across Germany have campaigned to protect another six neighbouring villages that were slated for demolition and appear to have had some success. RWE recently said that it would stop using coal in 2030 and so would drop its plans to raze five of the villages.

That just leaves Lützerath, where police are battling to evict hundreds of activists who have been living in abandoned buildings and makeshift treehouses for the past two and a half years. They have built a skate hall, farmed their own food and run workshops on climate justice.

Eckardt Heukamp was Lützerath’s last remaining resident until he moved out last year. “You saw how the church was torn down and dug up, how the villages have vanished,” he told the Times. “At some point you just say to yourself that it can’t keep going on like this, being subjugated and driven into a corner all the time.”

The showdown between the authorities and occupying activists escalated on Wednesday as riot police armed with batons moved in to evacuate the area, hauling out protesters and making arrests as fires burned in the streets of the village.

Just a few hundred metres away, one of the world’s largest land vehicles continues to carve away at the earth, bringing the edge of the mine ever closer to Lützerath.

Meaningless targets

In order to secure the loan, RWE committed to reducing its carbon emissions per unit of power generated, across all its energy sources. This means that, as long as it adds enough wind and solar power into the mix, the company could in fact increase its emissions from coal – and its planet-warming emissions overall.

It also committed to increasing the proportion of energy it generates from renewables and the amount it is investing in sustainable energy.

The penalty if RWE fails to meet all three targets is an increase in the interest it pays on the loan of less than 0.03 percentage points.

“It’s almost meaningless,” said Tariq Fancy, BlackRock’s former chief investment officer for sustainable investing. “Because the only thing that really changes behaviour in financial markets is when you change incentives. And you can’t change incentives with something so miniscule.”

Critics say RWE – which is Europe’s largest emitter of CO2 – could single-handedly stop Germany meeting its climate targets. Catharina Rieve of the German Institute for Economic Research said this will be the case if the company follows through with its plan to burn 280m tonnes of coal from the Garzweiler mine before 2030.

RWE told the Bureau it disputed this projection because the EU’s emissions trading system means that “if one company emits less, other companies elsewhere can emit more”.

The company added: “In the current energy crisis, ensuring security of supply is vital. At the same time, protecting the climate remains one of the key challenges of our time. RWE supports both. The company invests billions of euros into accelerating the energy transition.”

The HSBC banker said it was questionable to view a company as transitioning to net zero while it was expanding coal extraction, and that the bank’s attempts to challenge polluters on their transition plans was minimal.

HSBC decided the loan should not be classified as “sustainability-linked” internally, even though environmental targets remained part of the agreement. The bankers agreed it should not count towards HSBC’s target to contribute up to $1tn in sustainable finance by 2030 because of RWE’s plan to expand the Garzweiler mine and demolish several villages.

Barclays and Santander declined to comment on whether they are counting their parts of the RWE loan package towards their internal sustainable finance targets.

HSBC told the Bureau: “We have been clear we will finance energy companies who are taking an active role in transitioning to a net zero energy future, and we remain committed to this goal amid the double challenge of tackling climate change and an acute energy crisis in Europe.”

RWE is not the only company expanding fossil fuel production that has borrowed money under the guise of sustainable finance. Refinitiv data shows that Chrysaor – now part of the UK North Sea’s biggest producer of fossil fuels – raised $4.5bn with a sustainability-linked loan arranged by HSBC, Barclays, Lloyds, Natwest and a number of other banks.

One of the biggest oil producers in the US, Occidental Petroleum, raised $4bn, and the world’s biggest oil services provider Schlumberger raised $912m, also with sustainability-linked loans arranged by HSBC and other banks.

Tony Burdon, chief executive at Make My Money Matter, which campaigns for greener investments, said: “HSBC took an important first step in ceasing direct finance towards fossil fuel expansion projects. But as this report so clearly shows, they haven’t gone far enough.

“By continuing to provide sizeable corporate loans to companies involved in fossil fuel expansion such as RWE, HSBC is not just damaging the environment and displacing communities, they’re undermining their own climate targets.”

Lead image: Riot police stand in front of burning barricades as activists stage a protest in Lützerath. Credit: Bernd Lauter / Getty

Reporter: Josephine Moulds
Environment editor: Robert Soutar
Impact producer: Grace Murray
Global editor: James Ball
Editor: Meirion Jones
Production editors: Alex Hess and Frankie Goodway
Fact checker: Andrew Wasley

This reporting is funded by The Sunrise Project. None of our funders have any influence over the Bureau’s editorial decisions or output.

Original article from The Bureau of Investigative Journalism republished under Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Continue ReadingHSBC’s secretive loan to a coal company bulldozing a village

New Cumbria coalmine likely to break UK’s climate pledge, analysis says

https://www.theguardian.com/environment/2023/jan/17/cumbria-coalmine-uk-climate-goals-methane-emissions

The new coalmine in Cumbria is likely to prevent the UK from meeting its internationally agreed commitment to reduce emissions of the powerful greenhouse gas methane, analysis has suggested.

The Whitehaven colliery, controversially approved by ministers shortly before Christmas, will release about 17,500 tonnes of methane every year, according to estimates from the Green Alliance thinktank.

That is about the same as 120,000 cattle, or about half the beef herd in Cumbria at present, and could put the UK’s methane-cutting targets out of reach.

The analysis comes as campaigners also raise concerns about the filing of more than 100 oil and gas drilling licence applications.

https://www.theguardian.com/environment/2023/jan/17/cumbria-coalmine-uk-climate-goals-methane-emissions

Continue ReadingNew Cumbria coalmine likely to break UK’s climate pledge, analysis says

Climate activists vow to take to streets to stop fossil fuel extraction

https://www.theguardian.com/environment/2023/jan/16/climate-activists-vow-to-take-to-the-streets-to-stop-fossil-fuel-extraction

‘Cease and desist’ letter signed by over 650,000 people sent to oil and gas CEOs follows removal of Greta Thunberg from coal protest

Hundreds of thousands of young climate activists have said they will continue “protesting in the streets in huge numbers” against fossil fuels, a day after Greta Thunberg was removed by German police from a condemned village atop a massive coal deposit.

In a cease-and-desist letter to the CEOs of fossil fuel companies, youth campaigners accuse them of a “direct violation of our human right to a clean, healthy, and sustainable environment, your duties of care, as well as the rights of Indigenous people”.

“This cease-and-desist notice is to demand that you immediately stop opening any new oil, gas or coal extraction sites, and stop blocking the clean energy transition we all so urgently need,” the letter says.

The letter warns that failure to act would mean citizens around the world would consider taking “any and all legal action” to hold the companies accountable. “And we will keep protesting in the streets in huge numbers,” it says.

Signatories included Vanessa Nakate from Uganda, Greta Thunberg from Sweden, Helena Gualinga from Ecuador and Luisa Neubauer from Germany. They say: “It feels extremely difficult to keep hope alive in the face of climate devastation around the world. But our hope lies in people – in the millions of us who are determined to come together and demand action. It’s time to put these CEOs on notice – showing them that 2023 will be a watershed moment for accountability.”

https://www.theguardian.com/environment/2023/jan/16/climate-activists-vow-to-take-to-the-streets-to-stop-fossil-fuel-extraction

Continue ReadingClimate activists vow to take to streets to stop fossil fuel extraction

World ‘way off track’ on climate targets, says UAE oil boss named COP28 chief

https://www.politico.eu/article/cop28-climate-change-targets-world-way-off-track-sultan-ahmed-al-jaber/

The world is “way off track” to hit climate goals, said Sultan Ahmed Al Jaber in his first address since being named negotiator-in-chief of COP28 climate talks on behalf of the United Arab Emirates, where the gathering will take place in late 2023.

“The world is playing catch-up when it comes to the key Paris goal of holding global temperatures down to 1.5 degrees,” Al Jaber said, adding that “the hard reality is that, in order to achieve this goal, global emissions must fall 43 percent by 2030.”

The UAE’s decision to entrust Al Jaber to broker global climate negotiations has drawn an intense backlash from environmental activists across the globe. They worry that inherent conflicts of interests may jeopardize the outcome of the flagship gathering.

https://www.politico.eu/article/cop28-climate-change-targets-world-way-off-track-sultan-ahmed-al-jaber/

Continue ReadingWorld ‘way off track’ on climate targets, says UAE oil boss named COP28 chief

Davos 2023: Big Oil in Sights of Climate Activist Protests

https://www.voanews.com/a/davos-2023-big-oil-in-sights-of-climate-activist-protests/6920107.html

Major energy firms including BP BP.L, Chevron CVX.N and Saudi Aramco 2222.SE are among the 1,500 business leaders gathering for the annual meeting in the Swiss resort of Davos, where global threats including climate change are on the agenda.

“We are demanding concrete and real climate action,” said Nicolas Siegrist, the 26-year-old organiser of the protest who also heads the Young Socialists party in Switzerland.

The annual meeting of global business and political leaders opens in Davos on Monday.

https://www.voanews.com/a/davos-2023-big-oil-in-sights-of-climate-activist-protests/6920107.html

Continue ReadingDavos 2023: Big Oil in Sights of Climate Activist Protests

Scottish Greens call on Westminster to ‘wake up to the reality of the climate crisis’

https://morningstaronline.co.uk/article/b/scottish-greens-call-on-westminster-to-wake-up-to-the-reality-of-the-climate-crisis

Image: Chris LeBoutillier / Creative Commons

THE Scottish Greens called on Westminster today to “wake up to the reality of the climate crisis” and change course on fossil fuels instead of “dragging us towards environmental disaster.”

The challenge followed publication of the Scottish government’s draft Energy Strategy and Just Transition document, which calls for a halt to new oil and gas exploration licences and outlines plans for Scotland to lead a transition to renewables.

The strategy includes ideas to increase the country’s renewable electricity generation capacity by 20 gigawatts (GW) over the next seven years, equivalent to nearly 50 per cent of current demand, the Scottish Greens said.

“Even as the world burns, the UK government has committed to approving 100 new oil and gas exploration licences and is opening the first new coalmine for 30 years.

https://morningstaronline.co.uk/article/b/scottish-greens-call-on-westminster-to-wake-up-to-the-reality-of-the-climate-crisis

Continue ReadingScottish Greens call on Westminster to ‘wake up to the reality of the climate crisis’

Climate Change Heroes Of 2022: António Guterres, Just Stop Oil, Greta Thunberg And Climate Scientists

An interesting long article reviews and discusses climate activism 2022 and looks forward to 2023.

On New Year’s Day, Extinction Rebellion caused a stir by tweeting, “WE QUIT! Our New Year’s Resolution is to halt our tactics of public disruption. Instead, we call on everyone to help us disrupt our corrupt government.”

“Choose Your Future & join us”, they added, providing a date and a location: 21 April, Parliament. The aim — the idea of the velvet revolution — is to get 100,000 people to commit to turning at Parliament on April 21, and also to commit to not going home again at the end of the day.

Please give this date some serious thought and ask yourself, if you already find yourself making excuses not to turn up, why it’s not worth doing. The presence of 100,000 people could genuinely be a tipping point — a gathering too large for the government to suppress via the vile anti-protest legislation passed by the former home secretary Priti Patel, and which the current home secretary, Suella Braverman, wants to expand, which criminalises protest, and equates disruption to save the planet with terrorism.

Continue ReadingClimate Change Heroes Of 2022: António Guterres, Just Stop Oil, Greta Thunberg And Climate Scientists

Sunak ‘hasn’t a clue’ on climate scientist claims

https://www.independent.co.uk/climate-change/news/labour-yougov-nhs-university-college-london-mps-b2256689.html

Prime Minister Rishi Sunak doesn’t understand climate breakdown and should revoke all new oil and gas exploration licences, a climate expert has said.

Professor Bill McGuire of University College London said he was not surprised that Mr Sunak did not mention climate in his New Year’s speech on Wednesday.

According to a YouGov poll, the environment ranks fourth in the public’s list of most important issues facing the country.

But it was left out of Mr Sunak’s five-point pledge to halve inflation, grow the economy, curb illegal Channel crossings and bring down the national debt and NHS waiting times.

A PM who issues more than a hundred new oil and gas exploration licences and gives the go-ahead for a new coalmine clearly hasn’t a clue or simply doesn’t care, or perhaps both

Professor Bill McGuire

https://www.independent.co.uk/climate-change/news/labour-yougov-nhs-university-college-london-mps-b2256689.html

Continue ReadingSunak ‘hasn’t a clue’ on climate scientist claims

Insulate Britain and Just Stop Oil vow to continue disruptive action

https://www.theguardian.com/environment/2023/jan/02/insulate-britain-and-just-stop-oil-vow-to-continue-disruptive-action

Commitment to ‘civil resistance’ comes after Extinction Rebellion said it would prioritise ‘relationships over roadblocks’

Just Stop Oil protesting in London 6 December 2022.

Just Stop Oil protesting in London 6 December 2022.

Insulate Britain and Just Stop Oil have doubled down on their commitment to disruptive climate “civil resistance” after Extinction Rebellion announced new tactics prioritising “relationships over roadblocks”.

“It’s 2023 and XR has quit,” Just Stop Oil said in a statement. “But it’s 2023, and we are barrelling down the highway to the loss of ordered civil society, as extreme weather impacts tens of millions, as our country becomes unrecognisable … there is now a need to face reality.

“We must move from disobedience into civil resistance – this is what the nurses and paramedics are doing. They are on the frontline of the harm being wreaked on us and have said no more.”

Insulate Britain said its supporters remained prepared to go to prison. “Insulate Britain supporters remain committed to civil resistance as the only appropriate and effective response to the reality of our situation in 2023,” its statement said.

Continue ReadingInsulate Britain and Just Stop Oil vow to continue disruptive action