Lloyds ends new oil and gas financing

Other major banks urged to follow suit

Lloyds Banking Group has committed to no longer directly finance new oil and gas fields. It is the first major UK bank to do so.

According to a statement, the group said it would not support: “… Direct financing (either via project finance, or reserve-based lending) of new greenfield oil and gas developments (fields which did not receive Oil & Gas Authority approval before the end of 2021)”.

The bank can, however, still provide general lending to oil and gas companies.

Campaign group ShareAction has engaged with Lloyds on this issue and Jeanne Martin, head of banking programme, encouraged other lenders to make similar commitments.

“Lloyds Banking Group has today set a new standard for the UK banking industry by committing to stop directly financing new oil and gas fields. We commend the bank for doing so and urge major UK banks such as Barclays and HSBC to swiftly follow suit.

“However, asset-level financing is only a fraction of the financing provided by banks to new oil and gas. Lloyds Banking Group should not rest on its laurels just yet, but instead urgently turn its focus to the companies behind these new oil and gas fields.

“With only a few years left to prevent the worst impacts of climate change, which is already devastating people’s lives around the world, it’s vital that banks ensure their funding accelerates, not hinders, the transition to net zero,” she said.