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Some of the largest institutional shareholders of HSBC have filed a climate resolution, urging Europe’s biggest bank to announce a strategy to reduce its exposure to lending money to fossil fuel development.
The shareholders—which include investors will total assets under management of US$2.4 trillion and some of which are the largest listed asset manager in Europe, Amundi, and the biggest listed hedge fund firm in the world, Man Group Plc—filed a climate resolution to be voted at HSBC’s annual general meeting in April.
HSBC said in October 2020 that it would “reduce financed emissions from our portfolio of customers to net zero by 2050 or sooner, in line with the goals of the Paris Agreement,” as part of a plan to prioritize financing and investment that supports the transition to a net zero global economy.
The shareholders, however, say that this pledge is not enough and lacks specificity, especially on how the bank plans to reduce and ultimately phase out financial support to oil, gas, and coal operations.
“Investors would expect HSBC to introduce robust project and corporate finance restriction criteria and a 1.5°C-aligned engagement policy for its clients in high-carbon sectors,” the shareholders said.
HSBC has provided more than US$86.5 billion in fossil fuel financing since the Paris agreement was signed. This makes HSBC Europe’s second-largest fossil fuel financier behind Barclays, and the 12th largest in the world, the shareholders said, citing data from the Rainforest Action Network (RAN).
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“HSBC is strongly committed to addressing climate change, in line with our clear ambition to align our financed emissions of our entire business portfolio to net zero by 2050 or sooner,” a spokesperson for the lender said, as carried by Reuters.
Last year, Deutsche Bank said it was ending financing for new oil and gas projects in the oil sands and the Arctic region effective immediately, becoming the latest major bank to reconsider lending money to fossil fuel projects in sensitive areas. In the United States, Goldman Sachs said in December 2019 that it would decline to finance new Arctic oil exploration and production and new thermal coal mine development or strip mining. Wells Fargo and JPMorgan have also said they would stop financing new oil and gas projects in the Arctic.
“We saw a flurry of such announcements in 2020 – including a pledge to become carbon neutral from the world’s largest fossil fuel financier, JP Morgan,” Wolfgang Kuhn, Director Of Financial Sector Strategies at ShareAction, said about the resolution at HSBC.
“But without concrete steps to back up these ambitions, including a commitment to reduce financing of key fossil fuel actors, they are nothing short of a PR exercise,” Kuhn said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.