HSBC has said it will stop funding new oil and gas fields in a huge win for climate campaigners.

The bank, ranked as the eighth largest in the world by total assets, had previously been widely criticised by activist groups for being one of the biggest lenders to energy companies.

In a statement, HSBC confirmed that it will not support oil and gas projects that received final approval after the end of 2021 and that it will expect more information from energy clients on their plans to cut carbon emissions.

The bank will continue to finance energy companies at a corporate level to help them evolve their business and drive development of cleaner energy sources. It will review strategic plans annually, HSBC said.

In comments to Reuters, HSBC's chief sustainability officer Celine Herweijer said that the new policy will cover biomass projects, hydrogen, nuclear, thermal coal and more. They said: "It's not no new fossil fuel investment as of tomorrow. The existing fossil fuel energy system needs to exist hand-in-hand with the growing clean energy system.

"The world cannot get to a net-zero energy future without energy companies being at the heart of the transition."

They added that the move was also a ‘pragmatic’ one given the surge in energy costs that emerged as a result of Russia’s ongoing illegal invasion of Ukraine.

The UK’s largest domestic bank Lloyds has also committed to a similar policy, while Barclays has increased its sustainable and transition finance target to $1 trillion by 2030.

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