HSBC has scaled up its climate commitments today after coming under fire from a group of investors for a lacklustre targets on sustainability.
The lender has agreed to phase down financing of fossil fuels in line with limiting global temperature rise to 1.5C, as well as to update the scope of its oil, gas, and thermal coal policies by the end of 2022, activist shareholder group ShareAction said today.
The commitments come after ShareAction and the investors sent a letter to HSBC boss Noel Quinn and Chair of the board Mark Tucker yesterday setting out a number of demands, including closing the loopholes in HSBC’s coal phase out policy and to cease financing for any new oil and gas projects.
ShareAction boss Catherine Howarth said HSBC’s commitments were an “important step” that showcased the power of shareholder engagement.
“The focus must now be on ensuring that these are implemented in a way that is robust and science-based,” she added.
“As Europe’s largest provider of financing to top oil and gas expanders, HSBC must act decisively.”
HSBC poured over $111bn into fossil fuel projects from 2016-2020, according to data from the Rainforest Action Network, and ShareAction said the bank had provided $59bn to top oil and gas firms in the same period.
The lender’s fossil fuel financing has stepped up every since the Paris Agreement was signed,the group claimed.
HSBC said in February that it aimed to slash emissions associated with loans made to its oil and gas clients by 34 per cent this decade, and would also set targets for its capital markets financing.
As part of the Climate Transition Plan to be published in 2023, HSBC would more closely link the targets to executive pay, the bank’s sustainability chief Celine Herweijer told Reuters.