HSBC Holdings is the largest bank in Europe and consistently ranks as one of the most important banks in the world. How unfortunate, then, to see its unabashed hypocrisy toward Canada.
In the summer of 2018, HSBC announced a new energy policy under which it would stop providing financial services to a large portion of the Canadian energy industry. The move directly targeted Canada, despite this country’s record of environmental innovation and protection. The bank said its energy policy was designed to encourage economic development without having an unacceptable impact on people or the environment. Activist groups cheered the move and wagged their fingers at Canada’s energy industry, urging the country to get on board an ill-defined anti-industry movement.
Little did we know that soon after waving goodbye to Canada, HSBC would fly into the open arms of Saudi Arabia, a regime notorious for a poor human rights record and lacking Canada’s stringent regulations and high environmental standards. You may have heard that the world’s largest oil company, Saudi Aramco, based in Saudi Arabia, has been preparing for an initial public offering (IPO) of shares.
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HSBC has been a leading global co-ordinator in the IPO process, working with the industry it so publicly disassociated itself from in Canada not even two years ago. Earlier this year, HSBC also worked with Aramco on its first international bond offering.
STORY CONTINUES BELOW
Report after report points to Canada as a global leader with high environmental, social and human rights standards. The Environmental Performance Index produced by Yale University and Columbia University in collaboration with the World Economic Forum ranks Canada sixth for overall environmental health and fourth in terms of air quality. By comparison, Saudi Arabia ranks 53rd and 56th, respectively.
In a measure of 51 societal and environmental indicators — the Social Progress Index from Deloitte and the Social Progress Imperative — Canada ranks ninth out of 149 countries. You’ll find Saudi Arabia down in 90th spot.
Canada’s oil and natural gas industry has not wavered in its commitment to continuous improvement. According to data from the Government of Canada’s 2019 National Inventory Report, Canada’s oil sands per barrel greenhouse gas emissions have fallen 32 per cent since 1990. Our energy industry has a demonstrable record of innovation, environmental protection and climate action. In 2016 alone, it invested $3.7 billion on environmental protection — nearly half the total of all Canadian business spending on the environment.
So why did HSBC leave Canada’s oilpatch? It can’t be because of human rights or the environment. Supporting Saudi oil does nothing for human rights or the environment.
HSBC’s decision not to provide financial services to Canadian energy did not signal the end of oil. It was simply more capital bleeding out of Canada’s industry and into parts of the world that don’t share our degree of concern for environmental protection, emissions reductions and human rights.
Demand for oil and natural gas continues to grow. In fact, the International Energy Agency’s World Energy Outlook 2019 says global demand for oil and natural gas will increase until the end of its forecast period and beyond and that they will remain the dominant sources of global energy.
Given the reality of the world’s energy needs, where should its oil supply come from? Participants in an international survey conducted by Ipsos on behalf of the Canadian Association of Petroleum Producers, said they would prefer to import Canadian oil, ranking Canada No. 1 in a list of the world’s 11 major oil and natural gas producing nations.
If HSBC is truly interested in decisions that benefit people and the environment, then, like the rest of the world, it should put Canada at the top of the list as the supplier of choice.