A complete guide to UK banks' sustainable finance and fossil fuel funding activities

The sustainable finance landscape has changed significantly over the past year: between anti-ESG policies in the US and anti-greenwashing laws elsewhere, many banks have walked back on certain climate commitments – including sustainable finance goals.

At the same time, some EU banks, including Deutsche Bank and BBVA, are doubling down on sustainable finance targets, as the European Central Bank maintains a strong focus on climate mitigation in its policies.

In the midst of this cross-Atlantic dichotomy, how are UK banks adapting? CSO Futures takes a look at the top five UK banks’ sustainable finance goals, climate policies and fossil fuel funding activities.

HSBC

Up to US$1tn in sustainable finance by 2030

HSBC has a goal to provide between US$750 billion and US$1 trillion in sustainable finance and investment by 2030. As of June 2025, the bank has provided US$447.7 billion in sustainable funds – which it defines broadly as “any form of financial service that integrates ESG criteria into business or investment decisions”.

The bank does not provide a detailed breakdown of its sustainable finance activities, but said in a recent sustainability report that 39% of these funds are to be used specifically for green activities, while 24% are allocated in the form of sustainability-linked financing – meaning interest rates are linked to sustainability KPIs, but recipients can use the proceeds for general corporate purposes.

Fossil fuels: Exclusion policies and funding activities

HSBC’s fossil fuel exclusion policy states that it “no longer provides new lending or capital markets finance for the specific purpose of projects pertaining to new oil and gas fields and related infrastructure when the primary use is in conjunction with new fields”.

In addition, the bank requires its energy sector clients to have transition plans compatible with its 2030 portfolio-level targets (which are currently under review) and net zero by 2050 ambition.

According to the Banking on Climate Chaos report, HSBC provided more than US$16 billion to fossil fuel companies in 2024 – and a total of US$67.4 billion since 2021.

HSBC climate strategy

In March this year, HSBC came under fire after it said it was delaying key parts of its climate goals by 20 years to 2050, while watering down environmental targets in a new long-term bonus plan. And in July this year, the bank announced it was leaving the Net Zero Banking Alliance. 

Barclays

Sustainable finance target: US$1tn by 2030

Barclays has set a target to facilitate US$1 trillion of sustainable and transition financing between 2023 and the end of 2030. As of June 2025, the bank has unlocked US$220.2 billion of this total.

According to the bank, bond issuance was the largest product category in 2024, accounting for 69% of total sustainable and transition financing while loans and equity accounted for 22% and 5% respectively. Barclays is reported to have earned US$666.2 million in revenue from sustainable and low-carbon transition finance in 2024.

Similarly to HSBC, Barclays defines sustainable finance as “green, social, environmental, sustainability and sustainability-linked finance and includes both financing with a specific purpose and general purpose financing”. 

Barclays came under fire a few years ago for allocating some of its sustainable finance funds to fossil fuel companies.

Fossil fuels: Exclusion policies and funding activities

Barclays updated its oil and gas policy in February 2024 to exclude direct support for new oil and gas fields and primarily associated midstream infrastructure. It remains unclear whether LNG terminals are included in the bank’s definition of “midstream infrastructure”. 

The bank is one of few financial institutions that increased their financing to fossil fuels in 2024 with US$34.4 billion. Since 2021, Barclays has provided US$98.9 billion in financing to the fossil fuel industry.

Barclays climate strategy

Barclays announced last week (August 1) that it was leaving the Net Zero Banking Alliance (NZBA), citing the departure of most other global banks.

The bank is still aiming to achieve net zero emissions by 2050, though it has commented on the impact of diverging policies and the world’s continued dependence on fossil fuels on climate targets.

Barclays has also set 2030 financed emissions targets for eight of the highest-emitting sectors in its portfolio: energy, power, cement, steel, automotive manufacturing, aviation, agriculture and commercial real estate.

Lloyds

Sustainable finance goals split in four areas

Lloyds’ sustainable finance targets are more short-term than other banks, and split between four areas: commercial banking (£30 billion sustainable finance for commercial banking customers between 2024 and 2026), motor (£8 billion financing for EV and plug-in hybrid electric vehicles by 2024), mortgages (​​£10 billion of mortgage lending for EPC A and B rated properties by 2024), and its insurance arm Scottish Widows (£20–£25 billion discretionary investment in climate-aware strategies by 2025).

In 2024, the bank achieved three of its four targets, totalling £20.8 billion in sustainable financing. It also set new three-year targets of £11 billion for EPC A and B mortgages and £10 billion for electric vehicles from 2025 to 2027. 

This brings the total amount committed since 2022 to £84 billion across the bank and up to £25 billion of investments in climate-aware strategies for Scottish Widows.

Fossil fuels: Exclusion policies and funding activities

Lloyds halted financing to new oil and gas developments in 2022 and exited UK coal power in 2023. The bank is not a top fossil fuel financier, having provided just US$7.8 billion to the sector since 2021 (US$1.6 billion in 2024).

Lloyds climate strategy

Lloyds is working to cut its financed emissions by 50% by 2030 and achieve net zero emissions by 2050.

NatWest

New sustainable finance target: £200bn by 2030

NatWest just announced a new £200 billion climate and transition finance target by 2030, having exceeded its previous goal to provide £100 billion in sustainable finance between 2021 and 2025.

With the new target, NatWest also published detailed Climate and Sustainable Funding and Financing Inclusion Criteria, which cover specific conditions for clients in the built environment, sustainable agriculture, energy efficiency, environmental impacts, IT, low-carbon technology, renewable energy, sustainable transport and waste management categories to receive funding labelled as sustainable.

Fossil fuels: Exclusion policies and funding activities

In 2021, NatWest announced that it would stop lending and underwriting to major oil and gas producers unless they have a credible transition plan aligned with the Paris Agreement in place by the end of 2021. 

However, in February this year, this policy was amended in a way which activists say created a “loophole”, allowing it to support oil and gas companies that had a credible transition plan in 2021, but may have changed their policies since then (which many oil and gas companies have done).

Despite this, NatWest was the only UK bank that provided more funding to the green economy than to fossil fuels between 2020 and 2024. In 2024, the bank channeled US$2.7 billion into the fossil fuel sector.

NatWest climate strategy

Beyond its net zero by 2050 target, NatWest is aiming for a 70% reduction in Scope 1 and location-based Scope 2 emissions by 2030, against a 2019 baseline, and at least a 50% reduction in financed emissions by the same deadline. 

However, the bank’s CEO Paul Thwaite said in its latest sustainability report that “achieving our 2030 ambition for Scope 3 financed emissions is increasingly challenging due to our acknowledged dependence on timely and appropriate government policy, technology developments and the supplier, customer and societal response required to support the transition”.

Standard Chartered

Sustainable finance target: US$300bn by 2030

Standard Chartered is aiming to provide US$300 billion of sustainable financing by 2030 – which is tied to an unusual goal to achieve US$1bn of sustainable finance income by 2025. The bank is largely on track to achieve this revenue target.

Standard Chartered mobilised US$121bn of sustainable finance from January 2021 to September 2024, with US$23.3 billion unlocked in 2024 alone.

The bank breaks down its sustainable finance activities between green assets (75%) including clean transportation, green buildings and renewable energy, and sustainable finance assets (24%), which are mostly social assets.

Fossil fuels: Exclusion policies and funding activities

Standard Chartered has provided US$37.9 billion of financing to the fossil fuel industry since 2021 – including US$11.1 billion in 2024. The bank has no exclusion criteria for oil and gas companies implementing expansion plans – excluding only unconventional activities such as oil and gas extraction in the Arctic or Amazon basin.

Standard Chartered climate strategy

Standard Chartered has a target to achieve net zero Scope 1 and 2 emissions by 2025 and in net zero financed emissions by 2050. It has also set interim 2030 targets against all 12 high-emitting sectors as defined by Net-Zero Banking Alliance (NZBA) Guidance.