HSBC shareholders ask bank to cut fossil-fuel lending exposure

Bloomberg

A group of HSBC Holdings Plc shareholders filed a resolution urging the bank to cut its support to the fossil-fuel industry.
Amundi SA, Europe’s largest listed asset manager, and Man Group Plc, the world’s biggest publicly traded hedge fund firm, were among 15 institutional investors overseeing a combined $2.4 trillion that are backing the move, according to a statement from ShareAction, the UK non-profit that coordinated the plan. The money managers, along with 117 individual shareholders, asked HSBC to publish a strategy to reduce its exposure to fossil-fuel assets and set targets in line with the Paris Agreement.
Banks are major contributors to global warming via their financing and lending activities, providing the world’s biggest polluters with funding for extraction and drilling. Their role as the money pipeline for the fossil-fuel industry has attracted greater scrutiny from investors and activists in recent years. It also has coincided with the banks themselves starting to build up their green-finance businesses.
“For a long time, banks remained out of the spotlight and all the focus was on the actual carbon emitters, but it’s becoming more obvious that banks are part of the problem too,” said Jeanne Martin, senior campaign manager at ShareAction. “There’s now increased interest among the investors
on the role of finance firms
in facilitating emissions and in
decarbonisation.”
In October, London-based HSBC said it would prioritize financing and investments that support the transition to a net-zero global economy and committed to cut the net-carbon emissions of its client portfolio to zero by 2050. The bank also said it planned to achieve net-zero emissions in its own operations and supply chain by 2030.
HSBC is “strongly committed to addressing climate change” and has a “clear ambition” to align its financed emissions to net zero, a company spokesperson said. The bank is a leader in sustainable finance and expects to provide as much as $1 trillion in finance by 2030 to help its customers decarbonise, the spokesperson said.
“As we work to set out the detail of our road map to net zero, we continue to positively engage with our customers, shareholders and ShareAction,” the company said in a statement.
ShareAction said investors recognise HSBC has made progress on climate-change matters, yet they’ve also called for the bank to do more and said its net-zero strategy contains no specific plans for phasing out its exposure to coal, oil and gas. The resolution covers HSBC’s project finance, corporate lending and underwriting operations and requests the bank set short-, medium- and long-term targets.
The group of shareholders that filed the resolution, which also includes Brunel Pension Partnership, Rathbone Investment Management and Sarasin & Partners, requested HSBC make reducing its coal business the priority. The investors also asked HSBC “to consider the social dimension of the transition to a low-carbon economy” when devising its strategy and to not “rely excessively” on negative emissions technologies that remove carbon when developing targets.