Speaking at the World Economic Forum in Davos on Wednesday, Gulliver said it was “dangerous” to think that society should abandon the oil, gas and coal industry.
He warned of disastrous unintended consequences, in particular for developing countries, if the sector were ostracized, given that it is responsible for a huge numbers of jobs, money for pensions and tax revenues that fund education and health care.
He also said that the “massive engineering skills in oil and gas” were of great importance to developing countries.
Given the time it would take to scale up renewable energy, Gulliver said it was also important to recognize that coal, which is under greatest attack for its carbon emissions, would continue to be needed by developing countries for many years.
Gulliver admitted that HSBC was coming under pressure from activists to stop funding the fossil fuel industry, both at its annual meeting, as well as throughout the year.
But he made it clear he was not going to give in to their demands and insisted the company has transparent and responsible policies.
In particular he pointed to the fact that the bank sets tougher lending criteria for coal-fired power stations in emerging markets than those in developed economies.
He said he is also optimistic that the funding would be found from investors to develop renewable energy despite the low oil price, which makes new technology less financially attractive.
“The public wants to do this,” he said and pointed out that while raising finance for green projects is currently more expensive than traditional investments, he expects this to fall over time as the market develops.
He said the private and public sectors would be able to work in partnership to finance the $5.5 trillion in additional expenditure needed to move to a low-carbon economy.
“There is enough money in the finance sector to finance this,” he said.
Christiana Figueres, who led the recent global climate talks in Paris, was onstage with Gulliver on Wednesday and agreed that it would not help “to demonize the fossil fuel companies or anyone else.”
However, she said it was unacceptable for the sector to continue with business as usual and that the fossil fuel companies needed to switch their enormous resources and skills into helping the transformation to a low-carbon economy.
“I have been consistently saying that the oil and gas industry has to play its part,” said Figueres, the executive secretary of the United Nations Framework Convention on Climate Change. “There is no other way."
"They sit on access to capital, technology and incredibly trained engineers which can now be moved over to the new economy while they transition out of fossil fuels. They need to figure out which are the completely untenable investments,” she added, pointing out they have already abandoned more than $400 million in high-cost oil and gas exploration in areas such as the Arctic.
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