Investors urge HSBC to include all countries in its ban on new coal power financing
(6 March 2019 – United Kingdom) HSBC is facing investor pressure to put a stop to the financing of all new coal-fired power stations, including the three Asian countries the bank had previously excluded from its pledge.
A group of fund managers and shareholder groups have signed letter to John Flint, HSBC’s chief executive, asking him to stop future financing of coal projects in Indonesia, Bangladesh and Vietnam.
“Given the fast-paced changes affecting the coal sector globally and the rate of the low-carbon transition, HSBC is growing increasingly vulnerable to climate-related financial risks,” the group wrote in the letter sent on Tuesday. “We therefore request that HSBC institutes a prohibition of general corporate financing, underwriting and advisory services to companies who are highly dependent on coal.”
The group has also asked the bank to stop “general corporate financing, underwriting and advisory services to companies that are highly dependent on coal mining or coal power”.
HSBC promised to stop financing new coal projects across most of the world at its annual meeting last April. However, the British-based bank said it would continue to invest in Indonesia, Bangladesh and Vietnam until 2023, arguing that coal power was the only realistic way of sufficiently increasing the power supply in territories where vast swaths of the population have no access to electricity.
Daniel Klier, global head of sustainable finance at HSBC, said: “A targeted and time-limited exception applies to these three countries until 2023 in order to appropriately balance local humanitarian needs with the need to transition to a low-carbon economy.”