As part of its efforts to support a transition to a low-carbon economy, HSBC has pledged not to fund any new greenfield oilsands projects and new pipelines dedicated to the oilsands sector.

The updated energy policy associated with the company’s desire to be a leader in sustainable energy will apply to completely new mines or new “in situ” operations in geographically separate locations to existing ones. Incremental development of existing mines and “in situ” operations are excluded from the policy.

HSBC also will not finance new offshore oil and gas projects in the Arctic and has withdrawn from the coal-fired power sector.

However, the company is reassuring its Canada customers that the country remains a priority growth market and that it plans to be here for a long time.

“HSBC is a proud, long standing supporter of the energy sector both here in Canada and around the world — that is not changing,” said Sandra Stuart, president and CEO of HSBC Bank Canada. “We have been here for close to 40 years and we’ve invested $200 million here in the last two years alone.”

At the same time, HSBC is committed to doing its part in supporting the transition to a low carbon economy, she said. “As the leading international bank in Canada, our role is to help the country, its families and its businesses to adapt and responsibly balance a healthy economy with a healthy environment.  Just as we did during the energy sector downturn, we will continue to partner with our customers as they do the same.”

Daniel Klier, HSBC’s group head of strategy and global head of sustainable finance, said in a statement that the updated energy policy reflects HSBC’s ambition to help its customers make the transition to a low-carbon economy in a responsible and sustainable way.  “We recognize the need to reduce emissions rapidly to achieve the target set in the 2015 Paris Agreement to limit global temperatures rises to well below 2 C and our responsibility to support the communities in which we operate.”

HSBC said it has been a long-standing supporter of its customers who operate in the energy sector and the majority of the investment needed to enable the energy transition will need to come from companies that operate in this space. It added that it will continue to support those that are making “acceptable progress towards international good practice.”

The company said that in 2011 it decided to significantly restrict its support for new coal-fired power plants and effectively ceased financing them in 78 developed countries. It will now stop financing new coal-fired power in all countries around the world apart from Bangladesh, Indonesia and Vietnam. A targeted and time-limited exception will apply to these three countries in order to appropriately balance local humanitarian needs with the need to transition to a low-carbon economy.

In addition, HSBC will not finance new large dams for hydro-electric projects inconsistent with the World Commission on Dams framework and new nuclear projects inconsistent with the International Atomic Energy Agency (IAEA) standards.