The bank’s shareholders will vote at the bank’s annual general meeting in April to set commitments aligned with Paris.
Some of HSBC’s major shareholders are calling on Europe’s largest bank to step up its commitment to cut back on fossil fuel lending and turn its climate “ambitions” into targets.
Investors collectively managing some $ 2.4 trillion in assets filed for the resolution to be voted on at HSBC’s annual general meeting, after the bank declared in October its ambition to achieve zero net carbon emissions by 2050.
This pledge has been criticized by campaigners for not directly addressing HSBC’s lending to fossil fuel companies, including a relatively large share of clients involved in the coal business.
“HSBC is firmly committed to tackling climate change, in line with our clear ambition to bring our funded emissions across our entire business portfolio to net zero by 2050 or earlier,” said a bank word to Reuters news agency.
But after a four-year commitment period with HSBC, investors coordinated by responsible investment group ShareAction and whose largest European asset manager Amundi have said they want to see the bank go further.
“As Europe’s largest bank and second-largest provider of fossil fuel finance, HSBC has the unique opportunity to help the financial services industry move towards Paris-aligned commitments rather than mere ambitions,” said Jason Mitchell, Co-Head of Responsible Investment at UK Hedge Fund Man Group.
Investors want HSBC to set short- and medium-term goals in line with the goals of the Paris climate agreement, which aims to limit global warming to 1.5 degrees Celsius above pre-industrial standards by mid-century.
Extraction and drilling funds
Banks are a major contributor to global warming through their financing and lending activities, providing the world’s biggest polluters with finance for mining and drilling, according to environmental groups.
Since the signing of the Paris climate agreement in late 2015, HSBC has helped organize $ 89.1 billion in bonds and loans for companies in the energy sector, excluding producers of solar, wind and other renewables, the third-largest among European lenders, according to data compiled by Bloomberg News Agency. This includes $ 20.4 billion in 2020 for clients such as BP Plc and Saudi Aramco.
“For a long time, banks stayed out of the spotlight and everything focused on the real carbon emitters, but it’s increasingly clear that banks are part of the problem as well,” said Jeanne Martin, senior campaign manager at ShareAction. “Investors are now increasingly interested in the role of finance companies in facilitating issuance and decarbonization.
Among those supporting the resolution are Man Group, Swedish insurance company Folksam and UK investor Brunel Pension Partnership, along with 117 individual shareholders.
The spokesperson said HSBC would continue to engage with shareholders and ShareAction on the details of its plans.
The HSBC resolution, the second such action taken against a major UK lender, will need the support of 75% of the votes cast at its April meeting to pass.
ShareAction went after Barclays with a similar motion in May, which was defeated but garnered 24% of the votes cast.