Two prominent high street banks in the United Kingdom have been charged with funding the expansion of fossil fuels in the North Sea even after committing to align their operations with the net zero climate target. Tens of millions of dollars given to Ithaca Energy by HSBC and NatWest, two major British oil and gas companies involved in plans to develop the contentious Rosebank oilfield northwest of the Shetland Islands. Lloyds, another high street bank, supplied funding as well, but it has subsequently sold off the debt.
In a letter to the chief executives of the banks, over 80 organizations—including Rainforest Action Network, Greenpeace, and Global Witness—exhorted them to stop funding Ithaca and to sever their ties to the business.
In September of last year, the UK government gave its approval for Rosebank to exploited. Its estimated to hold the equivalent of 500 million barrels of oil, which, if burned entirely, would release 200 million tonnes of CO2. This is the largest undeveloped deposit in the UK.
According to rumours in the oil industry press, Ithaca Energy is investing billions in Rosebank’s development to start production in 2026. Ithaca Energy currently holds interests in six of the ten major producing fields in the North Sea. Its referred to by activists as a “pure play” fossil fuel corporation because it has no declared intentions to expand into the generation of renewable energy.
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As members of the Net Zero Banking Alliance, HSBC, Lloyds, and NatWest obligated to align their lending and investment portfolio greenhouse gas emissions to net zero by 2050 or earlier. Additionally, all three banks have made a public commitment to cease directly financing new oil and gas projects.
However, the Banking on Climate Chaos 2023 report states that Lloyds, HSBC, and NatWest gave Ithaca a total of $78 million (£61 million), $60 million (£47.0 million), and $78 million (£61 million) in financing between 2016 and 2022.
As far as known, Lloyds has subsequently sold up its debt facilities with the business and is no longer in the process of making loans to Ithaca.
The letter, which sent on Wednesday, asks the three banks and the nine other institutions that have linked to Ithaca’s funding to put pressure on the business to stop developing Rosebank and, if it doesn’t, to stop providing any more funding. Additionally, it demands that they create a legal policy mandating that clients have a transition plan in line with the climate agreements made in Paris.
According to the letter, “Your bank would exposed to significant risks if Ithaca Energy moves forward with the Rosebank field and other expansion projects.” This includes any future financing, including advising services. “These include potential effects on investor expectations, legal and regulatory claims, and reputational risks to the bank.”
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“Rosebank is the poster child for North Sea oil and gas expansion, so why are these banks—some of which say they no longer support new fossil fuel projects—giving billions to its minority owner, who has no plans to dial down oil and gas drilling?” asked Lauren MacDonald of the Stop Rosebank campaign.
If the project approved, Ithaca will earn hundreds of millions of dollars while producing more CO2 emissions annually than the 28 lowest-income nations put together.
“These banks need to stop this blatant greenwashing and stop financing Ithaca until it closes Rosebank if they are serious about keeping their climate pledges and addressing the climate crisis.”
