The NGO ShareAction has announced that 15 institutional investors ‘with a combined US$ 2.4 trillion in assets under management’ are backing its call for HSBC to reduce its exposure to fossil fuels.
In a statement issued today (11 January), ShareAction said that investors, alongside 117 individual shareholders, have filed a climate change resolution which calls on HSBC to ‘publish a strategy and targets to reduce its exposure to fossil fuel assets, starting with coal, on a timeline consistent with the Paris climate goals’.
The group includes: Europe’s largest asset manager, France-based Amundi; Swedish insurance company Folksam; the world’s largest publicly traded hedge fund company, Man Group; and UK pension pool Brunel Pension Partnership.
If the resolution receives more than 75% of the votes at HSBC’s AGM in April 2021, it would require the bank to publish a strategy and short-, medium- and long-term targets to reduce its exposure to fossil fuel assets on a timeline aligned with the goals of the Paris agreement.
ShareAction said that, according to the Rainforest Action Network (RAN), HSBC is Europe’s second largest financier of fossil fuels, after Barclays.
ShareAction commented: ‘RAN found it had provided US$87 billion to some of the world’s largest fossil fuel companies since the signing of the Paris Agreement (2016-2019). In October 2020, HSBC announced an ambition to be a net zero bank by 2050 at the latest, an important move given the bank’s strong exposure to Asia. But the announcement was criticised by investors and campaigners for making no commitment to reduce HSBC’s funding for fossil fuels, in particular coal, which has risen each year since 2016.’
ShareAction claimed that its own analysis showed that ‘in the four months leading up to its announcement, the bank pumped an additional US$1.8 billion into fossil fuel companies, including those constructing new infrastructure for coal and tar sands’.
According to ShareAction: ‘These findings cast serious doubt over the credibility of HSBC’s climate commitments, given that phasing out financing of fossil fuels is an absolute must for any net-zero strategy.’
ShareAction said the new resolution filed by the investors group was ‘the culmination of a four-year engagement with the bank’. In March 2019, a group of investors representing US$1 trillion in assets, co-ordinated by ShareAction, sent a letter to HSBC urging it to restrict its financing of the coal industry. The investor signatories included Schroders, Hermes EOS and Edentree Investment Management.
The resolution follows on from ShareAction’s January 2020 resolution at Barclays – which the NGO said was ‘the first ever climate resolution backed by institutional investors at a major European bank’. Barclays responded to that resolution by tabling its own and becoming the first mainstream bank to commit to net zero by 2050 at the latest.
Commenting on the resolution put to HSBC, Jeanne Martin, Senior Campaign Manager at ShareAction, said: ‘The message from the resolution is clear: net zero ambitions by top fossil fuel financiers are simply not credible if they fail to be backed up by fossil fuel phase out plans. Five years after the Paris agreement was signed, HSBC continues to pour billions into the coal sector, a behaviour that is at odds with limiting global warming to 1.5°C. If HSBC is serious about its net zero ambition, it will support this resolution.’