At its annual general meeting, more than 99 % of shareholders backed a decision obliging HSBC to commit to a zero-carbon portfolio by 2050. The bank is to work out a science-based strategy to achieve zero status gradually by phasing out financing of coal-fired power generation and thermal coal production and to provide yearly reports on its actions.
The decision will involve the bank undertaking a radical re-examination of its portfolio. As of October 2018, the bank had extended a total of more than $15 billion to companies representing the coal industry. The bank is Europe’s second largest in terms of credits extended in the fossil fuel sector after Barclays and works extensively with Asian coal companies.
The bank nonetheless noted that simply abandoning all dealings with customers from the hydrocarbon sector could be less effective than helping them with their transition to a cleaner economy. HSBC is expected to provide for its customers by 2030 up to $1 trillion in financing for the decarbonisation process.
The non-governmental organisation ShareAction, one of HSBC’s shareholders, also called on the bank to set out a clearer path in its gradual withdrawal from financing companies working in the fossil fuel sector.
“For a long time, banks remained in the shadows and the focus was on those who were directly responsible for carbon emissions. But it has become more apparent that banks are also part of the problem,” said Jeanne Matin, Senior Campaign Manager at ShareAction.
ShareAction urged HSBC to place financial limits on companies throughout the production chain and on coal consumption, including customers clearly dependent on coal and construction of new coal mines, power stations and infrastructure. The group said the bank was to require its customers to provide by December 2023 plans for gradually abandoning coal.