HSBC announced today it will no longer provide finance for new oil and gas fields, as part of efforts to shift to a “net-zero world.”

Environmental campaigners welcomed a move they believe sends a “strong signal to fossil fuel giants and governments” that the appetite for funding new oil and gas fields is diminishing.

But they urged HSBC to go further and to address finance for companies that have oil and gas expansion plans — and for other banks to follow suit.

And activists claimed the move was an “embarrassment” for the British government, which has announced plans to issue scores of new oil and gas licences in the North Sea, despite efforts to position itself as a climate leader.

Greenpeace UK’s senior climate campaigner Charlie Kronick said: “Ministers are now in the absurd position of pressing on with new oil and gas licences when the science rules out expansion and now with even banks are pulling out.”

The International Energy Agency has said that no new oil and gas development can now take place if the world is to cut carbon emissions to zero overall, known as net zero, by 2050.

That is needed to keep temperature rises to no more than 1.5°C to avoid the worst effects of climate change, including increasingly extreme storms, floods, droughts, worsening wildlife and crop losses and rising seas.

Jeanne Martin, head of banking programme at ShareAction, said: “HSBC’s announcement only applies to asset financing, and doesn’t deal with the much larger proportion of finance it still provides to companies that have oil and gas expansion plans.

“We expect to see HSBC come forward with new proposals that will address this as soon as possible.”