Shareholders at HSBC have voted overwhelmingly to end financing of the dirtiest fossil fuel, coal.
Preliminary voting results showed that 99.7 percent of the bank’s shareholders voted in favor of the management-backed climate resolution at HSBC’s annual general meeting.
This means the banking giant will be legally bound to phase out financing for all coal-fired power and thermal coal mining by 2030 in developed markets, and by 2040 in other markets.
Jeanne Martin of ShareAction, an investor campaign group that worked with HSBC to table the resolution, welcomed the result but warned against complacency.
“We’re delighted that our campaign has resulted in a binding commitment by HSBC to phase out coal, but the devil is in the detail and the next six months are crucial to ensure that this commitment is translated into robust sector policies,” she said.
The resolution will prohibit general corporate financing and underwriting to companies that are highly dependent on coal mining and/or coal power, as well as companies planning new coal mines, coal plants and coal infrastructure.
It will also mean HSBC will have to set “clear, measurable short and medium-term” targets to stay consistent with its target of achieving net zero emissions by mid-century. The bank has also committed to achieving its targets in line with the more ambitious Paris Agreement goal of restricting global warming to 1.5C, which is less reliant on negative emissions technology.
But campaigners are concerned that HSBC is still evading questions over its continued financial support of controversial fossil fuel projects globally.
Adam McGibbon of shareholder activist group Market Forces, which released a report on HSBC’s most polluting fossil fuel projects earlier this week, told DeSmog:
“HSBC’s management spent all day dodging questions from shareholders about climate change, and didn’t give a good-faith answer to a single one.
“HSBC wants you to think their financing of fossil fuels is all very complicated, but it isn’t. The International Energy Agency has just told the world that meeting climate goals means ending the expansion of the fossil fuel industry, starting now.
“Have HSBC committed to ending their funding of companies expanding the scale of the fossil fuel industry? No. Anything they say that falls short of that means they will continue to fund climate disaster, despite their claimed support for the Paris Agreement and their ‘net zero by 2050’ target.”
McGibbon added that the bank had evaded questions on supporting the world’s biggest polluter, Saudi oil company Aramco. The bank’s management also failed to fully answer questions on its involvement in Adani Ports, which is supporting the development of the controversial Adani Carmichael mine in Australia, or its potential backing for the East Africa Crude Oil Pipeline, a proposed 900-mile pipeline that would transport oil from Uganda to Tanzania, posing severe environmental and social risks.
Today’s vote to phase out coal finance comes after a study by researchers at the Center for Research on Energy and Clean Air (CREA) found that coal-fired power plants set to be built by companies part-owned by HSBC would contribute to tens of thousands of deaths worldwide due to air pollution once completed.
Last year, the annual Banking on Climate Chaos report revealed that HSBC had financed $111 billion (£78 billion) worth of fossil fuels since the Paris Agreement was signed, making it the 13th-largest funder of fossil fuels.
An unprecedented number of climate resolutions have been tabled at AGMs in recent weeks as demand for climate action intensifies among fossil fuel companies as well as banks. This week ExxonMobil and Chevron both faced shareholder rebellions in what was described by campaigners as a “paradigm shift”.
HSBC has been approached for comment.