Yahoo Finance HSBC announces climate vote after shareholder pressure
HSBC (HSBA.L) has announced plans to give shareholders a vote on its climate plans at its upcoming annual general meeting, heading off a potentially embarrassing rebellion over the bank's net zero plan.
HSBC on Thursday said it would propose a special resolution that will "set out the next phase" of HSBC's net zero plans.
Last October, the bank pledged to become net carbon neutral by 2030 and said it would make its financing activity net zero by 2050.
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READ MORE: HSBC pledges to go carbon neutral by 2050
Climate campaigners criticised the bank's announcement for being vague on the steps HSBC would take to reach its goal. Pressure group ShareAction coordinated with investors at the start of the year to organise a shareholder vote calling on HSBC to set clear targets for reducing financing for fossil fuel companies and projects, starting with coal.
HSBC on Thursday said ShareAction and its allies had agreed to withdraw their resolution in light of the bank's own proposals.
"We are pleased that ShareAction and a group of shareholders have agreed to support the resolution and would like to thank them for their positive ongoing engagement and constructive challenge and input as we have shaped the detail of our plans to support the direct financing requirements of our corporate clients in the low carbon transition," said Noel Quinn, chief executive of HSBC.
"This represents an unprecedented level of co-operation between a bank, shareholders, and NGOs on a critical issue, with a positive outcome for all."
READ MORE: Investors pressure HSBC to ditch coal
Becky Jarvis, strategist for the Bank on our Future coalition, which helped coordinate with ShareAction, said HSBC's decision to put in place targets was "the result of a gigantic effort by campaign and grassroots groups, customers, and investors all telling HSBC to end coal."
The pressure is not off," Jarvis said. "It still needs to put this in writing by the end of 2021 and actually end financing of companies facilitating the expansion of coal, like the Adani Group.
"We now also have our eyes on Standard Chartered and Barclays to put in place an even more ambitious coal end date."
HSBC's resolution will contain "clear, science-based strategy with short and medium term targets to align HSBC's provision of finance to the Paris Agreement goals," the bank said. The bank will publish a plan for phasing out financing for coal projects in the EU and OECD by 2030 and the rest of the world by 2040. HSBC will report annually on its progress against these goals starting this year.
The bank said it will set out "how it will support its customers on their own transition journeys", including up to $1tn to help "customers to progressively decarbonise and help realise the opportunity for long-term, sustainable growth."
"We are delighted to be setting out the next phase of our net zero strategy in this resolution, and invite our shareholders to support us on this journey," Quinn said.
