Stakeholders force HSBC to reveal its Net-Zero emission action plan

By Rahul Vaimal, Associate Editor
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15 institutional investors and close to 117 individual shareholders with stakes in British multinational financial institution HSBC have moved a resolution urging it to cut its support to the fossil-fuel industry.

A group of HSBC stakeholders including Amundi SA, Europe’s largest listed asset manager, and Man Group Plc, the world’s biggest publicly traded hedge fund firm was at the forefront of the move which was driven by a Uk-based non-profit ShareAction.

Sharing his insights into the coordinated communication, Jeanne Martin, Senior Campaign Manager at ShareAction stated that “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. There’s now increased interest among investors on the role of finance firms in facilitating emissions and in decarbonization.”

The financial institution has now been demanded to provide a strategy to reduce its exposure to fossil-fuel assets and set targets in line with the Paris Agreement.

Earlier in October, HSBC had made a public commitment that it will focus more on financing and investments that support the transition to a net-zero global economy while reducing the net carbon emissions of its client portfolio to zero by 2050.

The bank itself made a commitment to achieve net-zero emissions in its own operations and supply chain by 2030.

Meanwhile, the data compiled by Bloomberg has revealed that HSBC has helped arrange $89.1 billion of bonds and loans for energy companies, excluding solar, wind and other renewable producers since the Paris climate agreement was signed at the end of 2015. The amount is said to be the third most among European lenders and includes $20.4 billion in 2020 for clients including BP Plc and Saudi Aramco.

ShareAction has argued that HSBC investors do recognize that the bank has made progress on climate-change matters, they have asked 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.

Industry data has revealed that London-based Barclays is the biggest lender in Europe to corporate emitters over the period, providing $92 billion of financing, followed by BNP Paribas SA with $90.5 billion.

US-based JPMorgan Chase & Co has been the biggest lender globally since the start of 2016.

HSBC shareholders are expected to will vote on the resolution at the lender’s annual meeting in April.