Europe's largest bank yesterday announced it will stop financing new oil and gas fields, as part of its efforts to drive down global greenhouse-gas emissions.
HSBC said it made the decision after receiving advice from energy experts.
The BBC says the move comes following previous criticism of HSBC for funding oil and gas projects despite its green pledges.
In 2020, the bank made a pledge to be net-zero and invest up to $1trillion (just over £800billion) in clean energy.
However, HSBC came under criticism earlier this year when it was revealed it had invested an estimated £6.4billion into new oil and gas in 2021.
In the update to its energy policy, the bank said the decision had been made following consultation with leading scientific and international bodies who had estimated that current oil and gas fields would meet any demand in 2050 under a net-zero scenario.
Climate change
Under the 2015 Paris Agreement, 197 countries agreed to try to keep temperature rises "well below" 1.5C to avoid the worst impacts of climate change.
Experts say that to achieve this, net zero must be reached by 2050.
HSBC follows Lloyds bank - Britain's biggest domestic bank - which announced a similar decision in October.
It is not yet clear if this is the beginning of a trend across the sector, but it comes just months after the UK Government announced a new round of licensing for oil and gas production in the North Sea.
HSBC has said it will continue to keep its investments already in oil and gas fields as it recognises that fossil fuels, especially natural gas, have a role to play in the energy transition, "even though that role will continue to diminish".
Francesca Bell, senior investor relations advisor at Offshore Energies UK, said: "The UK Government's British energy security strategy made clear the need to support the production of North Sea oil and gas, alongside the deployment of offshore wind, solar and hydrogen.
Constant investment
"We support that strategy. At the moment, our members produce nearly 40% of the nation's gas. We can only maintain that kind of output by constant investment. In the future, we want to move to supplying low-carbon energy. But that will need investment too. This is a multi-decade project.
"During those decades, energy security will be also key. The Ukraine conflict and resulting energy shortages show that ongoing exploration in our waters is critical to ensuring reliable supplies of domestically-produced energy in as clean a way as possible.
"The key point is that delivering UK energy is expensive - providing energy now and building the low-carbon systems of the future will cost billions of pounds a year. That means support from the government and ongoing commitment from banks is essential. We want them to work with us, not against us.
"If financial institutions withdraw support, then the UK's energy security will be undermined, and the government will struggle to deliver a homegrown transition to cleaner energies."
Jeanne Martin, head of the banking programme at ShareAction, a charity that campaigns for reducing investment for fossil fuels like oil and gas, said: "HSBC's announcement sends a strong signal to fossil-fuel giants and governments that banks' appetite for financing new oil and gas fields is diminishing."
The charity called on other banks to follow suit - saying this move sets a "a new minimum level of ambition" for the sector.