Investors call on HSBC to restrict financing of coal in Bangladesh, Vietnam and Indonesia
A group of shareholders has called on HSBC to stop financing coal projects in Bangladesh, Vietnam and Indonesia.
A group of HSBC Holdings shareholders representing $1 trillion in assets either under management or stewardship have called on HSBC Bank to stop financing coal power projects in Bangladesh, Vietnam and Indonesia.
In a letter, the group highlights the knock-on effects of investing in banks that are still tied up in coal as legislation clamps down on fossil fuels and the energy mix moves toward cleaner energy sources.
“By financing coal power sector expansion in these three countries, HSBC is facilitating the lock-in of high-carbon infrastructure and avoidable emissions, and failing to support these countries in the transition to a low-carbon economy,” the investors said.
They have requested that the bank aligns with leading peers such as Standard Chartered, which announced last year that it will stop financing new coal power plants everywhere in the world.
In response to the letter, HSBC said it is committed to helping its customers “make the transition to a low-carbon economy in a sustainable way”.
HSBC is making a “targeted” exception for these three countries until 2023 “in order to appropriately balance local humanitarian needs with the need to transition to a low-carbon economy,” said Daniel Klier, global head of sustainable finance at HSBC.
This exception only applies as long as “independent analysis confirms that there is no reasonable alternative to coal and any new plant complies with the highest efficiency standards,” Mr. Klier said.
The letter was supported by responsible-investment charity ShareAction and included signatories such as investment management firms Schroders, Hermes Investment Management and EdenTree.
The action follows several successful investor engagements on climate change, which saw coal producer Glencore recently agree to limit its production of the fossil fuel.
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