In the Campos basin off the south-east coast of Brazil, two ships contracted by a major energy corporation will be used to mine vast quantities of oil in a project that could generate more than 1 billion tonnes of CO2 emissions.

In east Africa, an engineering company is preparing to start work on the construction of an environmentally devastating oil pipeline that threatens to derail vital targets set out in the Paris Agreement. And in the north of India, one of the world’s largest cement companies – which last year emitted more CO2 than Greece – has applied to clear a large swathe of forest less than a kilometre away from a wildlife sanctuary.

All these companies’ operations have not only been facilitated by HSBC – which claims it is “helping to lead the transition to a more sustainable world” – but have benefited from deals that the bank has labelled sustainable finance.

HSBC has committed to contribute up to $1 trillion in sustainable financing and investment by 2030. However, the Bureau can reveal that billions of dollars being counted towards this target are in fact helping to fuel the climate crisis.

Central to the issue is a relatively new financial product known as a sustainability-linked bond (SLB). SLBs are an ostensibly green type of debt, designed for companies to raise money to fund their transition to more sustainable activities.

Companies that raise funds through SLBs do not face tight restrictions on how that money is used; instead they agree to certain targets related to sustainability. But these targets are often remarkably weak and the penalties for failing to meet them can be paltry – leaving SLBs as a way for companies to give the appearance of environmental concern while continuing to worsen the climate crisis.

For instance, the cement company applying to clear woodland in India is UltraTech, which has faced strong opposition in the country over environmental damage caused by its operations and was recently fined for breaching air pollution limits. HSBC has helped UltraTech borrow $400m via an SLB, according to data provided by Refinitiv, with a target for the company to cut emissions by 22% per tonne of cement produced by March 2030.

But should UltraTech fail to meet that target, the penalty would be an increase in the rate of interest on the bonds of less than 1%. And because the assessment date is just six months before the debt is due to be repaid, the total sum would be just $3m – or 0.05% of the company’s revenues last year.

An analysis of the bonds HSBC counts towards its sustainable finance target found at least $2.4bn worth of deals for companies that are worsening the climate crisis. Whether in the form of “green bonds” or SLBs, the bank is helping raise money to fund the expansion of fossil fuels, air travel and deforestation – and labelling it as sustainable finance.

Sean Kidney, chief executive of the non-profit Climate Bonds Initiative, told the Bureau that companies find SLBs particularly attractive because they are easier to issue than green bonds: “Treasurers will try anything that reduces their cost of capital,” he said, adding that the SLB market is “deeply compromised” and bank targets for sustainable finance are “flaky as hell”.

HSBC is already under pressure over greenwashing after a series of adverts about the bank’s environmental initiatives was banned by the UK advertising watchdog. The Advertising Standards Agency said HSBC had misled customers and had to ensure that any future claims did not “omit material information” about its contribution to the climate crisis.

Ulf Erlandsson, chief executive of the Anthropocene Fixed Income Institute, a research body, said sustainable finance is used like a “papal indulgence you buy for your sins”.

He added: “You might subsidise the sustainable part of your business and push on that for your green statements while continuing to be involved with a large oil corporation.” He points to HSBC’s longstanding relationship with Saudi Aramco, the world’s most polluting company, for which the bank is reported to have facilitated billions of dollars in loans.

Destroying the environment in India

As well as its heavy carbon emissions, UltraTech has been repeatedly criticised for its impact on the local environment. People living near its mines in Gujarat say dust from the operations have damaged their crops. Some houses are just 50 metres from UltraTech’s stockyard, which is piled high with surplus cement.

The company’s permit requires it to settle the cement dust with water but local residents say this rarely happens. Those who live closest to the plant sweep up mounds of dust every day and have noted a rise in cases of lung disease in recent years.

UltraTech told the Bureau all of its cement manufacturing units are operating in full compliance with all applicable environmental norms and regulations.

Razing reserves in east Africa

Another bond HSBC counts towards its sustainable finance target was raised by Worley, which does most of its business in fossil fuels and petrochemicals. Worley borrowed more than $600m via a sustainability-linked bond last year with the help of HSBC. Under the terms of the bond, Worley has committed to cutting the emissions of its operations and its energy suppliers. But this pales in comparison to the emissions the company facilitates through its work expanding oil and gas production and coal mining.

For example, the company is the engineering contractor for the East African Crude Oil Pipeline (EACOP) – an environmentally ruinous project that will slice through elephant and giraffe habitats and is expected to generate 33m tonnes of CO2 each year. EACOP is expected to pump 216,000 barrels of oil per day from new oil fields in Uganda, a country at the frontline of the climate crisis.

‘We need more rules so in a year’s time, HSBC will find it much harder to put in crap bonds. At the moment it’s an absolute mess’ – Sean Kidney, Climate Bonds Initiative

“Climate change is really a major concern when you look at a project like EACOP,” said Diana Nabiruma from the Africa Institute for Energy Governance, an NGO focused on promoting clean energy. “We are already experiencing climate change and we are one of the least prepared countries to address its impacts.”

More than half a million people are starving in Karamoja, in the north-east of Uganda, a famine that experts blame in part on the harsh drought and damaging floods that have battered the region. Ugandan MP Faith Nakut broke down when describing a recent visit. “A whole family died because they had no food,” she said. “So I came back really heartbroken because … I never imagined we would be at the level where people die because they were lacking food.”

EACOP’s 1,400km route crosses a number of nature reserves and one third of the pipeline runs alongside the vast Lake Victoria, which more than 40 million people depend on for their livelihoods. An Oxfam-commissioned review of its environmental assessment warned that oil spills “will occur” as a result of the project. Erlandsson said he would be wary of any sustainable finance product linked to EACOP because it is so controversial.

Worley, which did not respond to our request for comment, is working on several other projects expanding fossil fuels around the globe. One is the Nigeria-Morocco gas pipeline that will extend to Europe – an estimated $25bn project due to be completed in 2046, just four years before the world is supposed to achieve net-zero emissions according to the Paris Agreement.

The International Energy Agency has said that for global emissions to fall to net zero by 2050, and to limit global heating to 1.5C, new investments in oil and gas need to stop now.

A ‘carbon bomb’ in Brazil

That message has not filtered through to Yinson, a Malaysian company that contracts out FPSOs – vast ships converted into floating oil rigs. It has leased two of its ships to Brazil’s state-controlled energy group, which is amassing the world’s largest fleet of FPSOs, to mine the Campos basin – a project that has been described as a “carbon bomb”. Yinson raised $240m with an SLB arranged by HSBC with targets to reduce the carbon emitted by these ships and increase its production of renewable power.

If it fails to meet these targets, the maximum penalty Yinson will face is just $600,000 – or 0.07% of last year’s revenues. What’s more, the agreement covers the carbon emitted by the ships – but makes no mention of the vast increase in emissions from burning the oil that the vessels will help extract. Yet the money will still be labelled by HSBC as sustainable finance and counted towards its green goals.

Gustavo Pimentel, chief executive of NINT, an ESG research and advisory company, said calling this debt “sustainable” is greenwashing. “Somehow the market converged to call everything ‘sustainability-linked’ and I think this does a poor job of informing investors and society in general of what each transaction actually contributes to society,” he said.

A large part of the problem with SLBs lies in the fact that the second-party opinion providers, which assess the bonds’ sustainability credentials, are hired by the very companies issuing the bonds.

The consultancy hired by Yinson to assess its bonds, ISS, found the targets to be “relevant, core and material”. ISS came to this conclusion despite noting that Yinson’s “decarbonisation roadmap” appears to involve the company providing FPSOs for oil and gas production until 2050, while the International Energy Agency has called for major reductions in oil and gas production much earlier than that.

Yinson declined to comment.

Greenwashed bonds

HSBC’s sustainable finance target can also be met with green bonds, some of which are fuelling the climate crisis and would be considered greenwashing by one of its own senior bankers.

“For me, greenwashing is an issuer [of a green bond] financing an initiative that’s ultimately not aligned with the Paris Agreement,” Farnam Bidgoli, then head of HSBC’s sustainable bonds group in Europe, told Capital Monitor last year. “The assessment shouldn’t just be on the use of proceeds, but the whole company profile. It’s much more about the holistic issuer strategy.”

HSBC, however, helped the Airport Authority of Hong Kong raise $1bn via a green bond that can be used to fund the expansion of the airport. The proceeds can be put towards various ostensibly sustainable projects – such as developing “green buildings” – but the deal fails to account for the dramatic increase in carbon emissions from the extra flights that will result from the airport’s near doubling of capacity.

HSBC also helped Etihad Airways raise $600m with an SLB, with targets for the company to reduce the CO2 it emits per flight. The second-party opinion provider – paid for by the airline – said Etihad Airways’ 2025 targets were not in line even with the less ambitious 2C scenario target set by the Paris Agreement, but approved them anyway.

Etihad Airways told the Bureau: “By issuing a sustainability-linked [bond], Etihad is voluntarily adding to its existing commitments.” It said the proceeds of the bond will be used to fund investments in its transition to becoming a net-zero company by 2050. Vigeo Eiris, which evaluated the target, said the bond aligned with international standards and that the assessment was accurate at the time it was published.

Other bonds that HSBC puts towards its sustainable finance target include those raised by energy giants Enel, which is expanding the capacity of its gas-fired power stations; and Repsol, which was responsible for an oil spill that has been called Peru’s worst ever environmental catastrophe. Proceeds of the green bond raised by Engie, a French energy company, can be used to convert two power plants from burning coal to burning wood instead. Many scientists say power stations that burn wood add two to three times as much carbon dioxide to the air as those burning fossil fuels.

Enel told the Bureau its overall electricity output is expected to grow but that the proportion generated by burning gas and other fossil fuels will decrease by 2024, in line with its path to net zero by 2040. Repsol declined to comment. Engie disputes the scientists’ analysis of emissions from burning wood for energy compared with fossil fuels.

Elsewhere, HSBC helped raise $600m via an SLB for a financing arm of John Deere, which provides credit lines for buyers of its own heavy machinery. This has been linked to the illegal deforestation of the Amazon, according to a recent report.

John Deere told the Bureau: “We do not condone the use of our machinery in illegal activities on protected or preserved land. Such activity violates John Deere’s values and policies which aim to create sustainable solutions for all customers. John Deere Financial in Brazil meets and/or exceeds all federal regulations for reviewing and approving financing applications.”

HSBC also worked with China Construction Bank (CCB) to raise an SLB with a target that it may have already reached at the time the bond was issued. CCB last year helped thermal coal companies raise $34bn, according to the Global Coal Exit List.

The Beijing-based Asian Infrastructure Investment Bank (AIIB), meanwhile, issued several bonds that will go towards HSBC’s sustainable finance target. AIIB has pledged not to support coal-related infrastructure but in practice the bonds could be used to fund any of its ongoing projects. These include the upgrade of a major coal transport route in Bangladesh that uprooted hundreds of homes and businesses, and the development of a floating offshore gas carrier to be contracted out to BP.

Neither CCB nor AIIB responded to our requests for comment.

Kidney of the Climate Bonds Initiative said so-called sustainable finance warrants serious scrutiny from media and NGOs. “We’ve got to put up more guidance and more rule sets, then we’ll start shooting people down more aggressively, including the banks. So in a year’s time, HSBC will find it much harder to put in crap bonds. It is, at the moment, an absolute mess.”

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This article was first published by The Bureau of Investigative Journalism.

Constant demolitions of homes, structures and other infrastructures have become a norm in most African urban areas. These demolitions are classed. This can be observed by studying the ongoing (re)construction of a Shell petrol station in Kileleshwa, on the affluent side of Nairobi, Kenya’s capital. The petrol station is under reconstruction at the exact location it was deemed illegal four years ago. This prompts us to reflect on race and class in Nairobi’s demolition history. A reflection that shows how the landscape of Nairobi is not only an archive of British colonialism but is a continual perpetuation of the colonial project of discriminatory citizenship, inequality and structural violence.

During British colonial rule the now affluent areas of Nairobi such as Kileleshwa, Westlands and Karen were reserved for white colonialists. Africans were only allowed to enter them to offer their labour under strict scrutiny imposed through the Kipande identification system which tied them to an employer. The African population was to be a transitory workforce in Nairobi, not a permanent one. But as time went by and more Africans came to the city, they started building houses in the east side of the city because neither the authorities nor their employers provided housing. Demolitions soon became a norm in these areas, where “African villages” were constantly set on fire to, in the words of Wangui Kimari, to “make the city legible to empire—racially, spatially, ecologically, and economically”.

Contemporary urban demolitions

Current demolitions are justified under the banner of cleaning up and building the city to attract investments. Projects set under this banner often include roads, for example the recent building of the elevated, 17-km-long expressway connecting affluent sides of Nairobi with the airport. Demolitions for construction of a link road connecting an industrial area to the expressway in 2021 caused a humanitarian crisis as about 40,000 people were left homeless, and forced to fight back on the street, in one of the popular neighbourhoods, Mukuru Kwa Njenga. The other set of projects that involve demolitions are heralded as restoring the “green city under the sun” and often include efforts to clean the Nairobi river.

In 2018, there was a marked increase in demolitions on ‘riparian land’ – this is land which is adjacent to rivers and streams and is subject to periodic or occasional flooding. The demolition spree was led by a multi-agency task-force consisting of the then newly formed Nairobi Regeneration Committee, along with the National Environment Management Authority (NEMA) and the county government. Here, they argued, they were recovering riparian land from illegal land grabs. In August 2018 buildings in different parts of Nairobi were bulldozed. What was new and unexpected to most Kenyans was that some of these demolitions were in the affluent suburbs. For example, news of demolition of a Shell petrol station and adjacent Java House cafe at Kileleshwa, and the Ukay mall sparked shock amongst the investors and on social media. These buildings and others caught up in that phase of demolitions were claimed to be on riparian land.

However, it is important to note the fragmented governance of riparian land in Kenyan laws. Confusion exist on how to measure riparian land. There are overlapping mandates for their protection in at least eight pieces of legislation passed by parliament over the last decades. These are sometimes contradictory. For instance, the 1999 Environmental Management and Coordination Act defines it as ranging from a minimum of 6m and a maximum of 30m from the highest watermark while the 1989 Survey Act recommends 30m from tidal rivers. These fragmented and incoherent laws and policies continue to cause confusion. They have also created a legal loophole which the authorities and Kenyan elites have exploited to order demolitions and land grabs over the years.

During such demolitions, heavy security is used. This demonstrates the normalised structural violence. The 2018 riparian demolitions were also executed in the early hours of the morning or at night, causing great insecurity and vulnerability. Court orders and legal title deeds by residents are often ignored, leaving residents to fend for themselves and with no compensation.

Classed rebuilding

However, after exactly four years, the Shell petrol station demolished in August 2018, is currently under reconstruction in exactly the same location with permission and licence from the necessary agencies, including NEMA as seen from the construction site board. During its demolition the official statement by the environmental management body was that it was encroaching on riparian land and was also on a road reserve. Its reconstruction demonstrates the recolonizing nature of demolitions in Nairobi: when they are enacted against the working class they are permanent but when carried out in affluent areas they are only temporary with loopholes that the elites can exploit to rebuild or receive compensation.

Towards urban justice

In her book, The Struggle for Land and Justice in Kenya, Kenyan legal scholar Ambreena Manji explores the law relating to land and its administration. She studies the country’s rich but scattered ‘land archive’ through which she shows how land law has been the most emotional part of Kenyan laws. She further shows that the struggle towards land justice is ongoing in a variety of different ways, including through case laws. In regards to urban demolitions, some optimism about the possibility of ending demolition or moving towards the creation of a proper compensation structure can be seen in recent court judgments.

In the case, Mitu-Bell Welfare Society v The Kenya Airports Authority, the court noted the discriminatory aspect of demolition by pointing out that while the informal settlement, Mitumba village near Wilson Airport, had been demolished, adjacent multi-story buildings were left untouched.The judgement demanded that demolitions are accompanied by reasonable alternative accommodation.

Building on this precedent is the judgement in William Musembi vs The Moi Educational Centre Co. Ltd lodged by residents of two informal settlements who had faced the bulldozers in 2013 after occupying the pieces of land in 1968. The Supreme Court noted that even when the residents did not have the legal titles to land they acquired a protective right to housing through occupation.

Together, these judgments if respected, may lead us to urban land justice. But this will require an end to the recolonizing aspects of demolitions that has normalised the near-constant demolitions of homes and structures in working class neighbourhoods of Nairobi.

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The author would like to acknowledge and appreciate the support of Ambreena Manji in reading earlier drafts of this text.

This article was first published by ROAPE.

“Most farmers can no longer produce adequate food for their families,” says Vladimir Chilinya. “Profit-making entities control our food systems… including the production and distribution of seed.”

Chilinya is a Zambian coordinator for FIAN International, an organisation that campaigns for the democratisation of food and nutrition.

Worsening harvests, infertile soil and increasing food poverty are affecting the majority of small farmers across the globe, especially in the Global South. Wheat prices have surged by 59% since the start of 2022.

In May, UN secretary-general Antonio Guterres warned that the number of people living in famine conditions has increased by more than 500% since 2016, and more than 270 million people are now living in extreme food insecurity.

While Vladimir Putin’s invasion of Ukraine has exacerbated this crisis (Russia and Ukraine account for 30% of the world’s wheat exports, constituting 12% of traded calories), climate change and capitalism are the primary engines behind this global food emergency.

The IPCC has estimated that by 2030, global warming will have diminished the world’s average agricultural production by more than a fifth. In Zambia, the maize harvest for 2021/22 is expected to be down by a quarter, thanks to droughts and flash floods between 2019 and 2021, according to the Ministry of Agriculture.

Meanwhile, India and Pakistan experienced their highest recorded temperatures in March and April since records began 122 years ago. India has since banned wheat exports (after the government failed to buy enough wheat to cover its food security programme), which has further exacerbated the global wheat shortage and soaring global food prices.

But the climate and food crises are not isolated phenomena. They are the result of a global capitalist system – and a neoliberal agenda – that has prioritised big corporate agricultural profits over people and the planet.

Corporatisation of agriculture

This process really took shape during the so-called “Green Revolution” in India in the late 1960s. This movement was a collaboration between India and the US (with USAID and the Ford Foundation being key actors) and was dependent on agrochemical usage and intensive plant breeding.

High-yielding hybrid crops were introduced – the main one being IR8, a semi-dwarf rice variety – alongside the use of fertilisers, pesticides and lots of groundwater (these high-yielding crops required a lot more water). Calorific food was valued over nutrition, and these foods had costly inputs.

This shift towards big agriculture and more profitable monocultures made small farmers more dependent on expensive chemical fertilisers, forcing them into ever greater levels of debt. In India, 10,677 agricultural workers were reported to have taken their own lives in 2020, many of them farmers trapped by mounting debts resulting from the high costs of these farming inputs.

Unfair terms of trade and global lending – enforced by multilateral financial institutions such as the World Bank and the International Monetary Fund (IMF) – are also to blame.

Structural adjustment programmes (SAPs), introduced by the World Bank following the debt crisis across Latin America and Africa after the 1979 oil crisis, coerced poorer countries into privatising their public sectors and reducing their welfare mechanisms.

Adhering to strict policy packages in nearly every key sector – from agriculture to education and healthcare – became compulsory in exchange for any future loans from the bank or the IMF.

SAPs meant indebted countries across the Global South had to convert from prioritising indigenous crops that the local population depended on, to producing cash crops for export. As a result, local populations and farmers became more vulnerable to food scarcity – due to the negative ecological effects and decline in food accessibility.

Zambia: seed privatisation

In Zambia, for example, the structural adjustment agenda included the privatisation and liberalisation of the seed system. It began with the liberalisation and deregulation of ZAMSEED in the mid-1990s, which led to a decline in support for farmer cooperatives. In addition, the priority of maize as a cash crop has led to a decline in crop variety, meaning the local population has fewer food sources available.

“Under recent policy changes, priority is given to maize production. This is one of the key drivers for monocropping, which is responsible for the reduction in varieties of available foods in Zambia,” Chiliniya from FIAN told openDemocracy.

FIAN is documenting how the corporate control of agriculture is weakening food security. Seed systems have gone from being cooperative-led (which gives farmers more agency and fair prices) to being corporate-led (which prioritises profits).

“Farmer-managed seed systems have been replaced by commercial seed systems,” Chilinya said. “Most smallholder farmers are unable to purchase seeds at the commercial price and hence they cannot grow any food.”

These commercial seeds are also more vulnerable to extreme weather conditions. “Most people focus on cash crops at the expense of other crops that are more resilient to extensive weather changes. In the wake of extreme weather changes like those experienced in 2020 and 2021, the country falls into a food shortage,” added Chiliniya. According to the World Food Programme (WPF), 48% of the Zambian population is unable to meet minimum calorie requirements.

Kenya: food crisis

OpenDemocracy also spoke with food justice activists in Kenya, which is experiencing a severe food crisis. “Land degradation is affecting food production in Kenya because of the overuse of chemical fertilisers,” said Leondia Odongo, co-founder of social justice organisation Haki Nawiri Afrika.

As in Zambia, the disastrous legacy of SAPs is to blame. In 1980, Kenya was one of the first countries to receive a structural adjustment loan from the World Bank. It was conditional on reducing essential subsidies for farmer inputs, such as fertilisers. This process instigated a shift towards farming cash crops for export, such as tea, coffee and tobacco, instead of farming key staples for the local population, such as maize, wheat and rice.

“Agricultural inputs that were previously provided to farmers free of charge went into the hands of private entities under the guise of efficiency,” Odongo explained. “This has resulted in smallholder farmers being abandoned to the mercy of transnational corporations in the seed and agrochemical industry, which dupe farmers with information about seeds and chemicals.”

A recent report by Save the Children and Oxfam found that 3.5 million people in Kenya are already suffering crisis levels of hunger – and this is likely to rise to five million. Meanwhile, only 2% of the $4.4bn required in humanitarian aid (for Kenya, Ethiopia and Somalia) has been funded.

Structural adjustment has made Kenya into a cash crop exporter. In the country, malnutrition remains concerningly high, with 29% of children in rural areas and 20% of children in cities being stunted. Despite experiencing deficits which threaten its population’s food security, Kenya remains a vital exporter of cash crops, with major exports in tea, coffee, vegetables and cut flowers.

Keep it small and local

Despite occupying less than 25% of the world’s farmland, small-scale farmers provide 70% of the world’s food. In Kenya, Haki Nawiri Afrika is resisting the corporatisation of agriculture by assisting local farmers with technical knowledge. Teaching smallholder farmers practical skills allows them to reclaim agency over their land and crops.

In Zambia, FIAN is helping small farmers return to indigenous farming practices and seeds to build resilience and improve food security. By diversifying food systems and abandoning monocultures, small farmers can continue to provide enough food for their communities, and at lower costs.

These small farmer movements are up against ‘Big Philanthropy’, such as the controversial Alliance for a Green Revolution in Africa (AGRA), funded by the Bill & Melinda Gates Foundation, which is replicating the Green Revolution corporate-first strategy.

Still, they hope their struggle to decommodify and rebuild a sustainable relationship with the land can help realise the UN’s second sustainable development goal: ending hunger by 2030.

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This article was first published on Progressive International.