LONDON (BLOOMBERG) - HSBC Holdings filed a shareholder resolution committing the bank to align its lending with the goals of the Paris agreement and wind down its support for coal.
The proposal was crafted following discussions with UK non-profit ShareAction and a group of HSBC shareholders, including Amundi and Man Group, that filed their own resolution in January.
ShareAction and the investors have agreed to withdraw their motion and instead support the bank's proposal when shareholders vote May 28 at the annual meeting, HSBC said in a statement.
Last year, HSBC said it plans to achieve net-zero emissions in its own operations and supply chain by 2030, and to eliminate the emissions of its client portfolio by 2050. The bank currently ranks among Europe's largest financiers of fossil-fuel companies.
London-based HSBC said Thursday (March 11) that its resolution "outlines the next phase of the bank's net-zero strategy, with a particular emphasis on how it will support its customers on their own transition journeys."
If the resolution passes, HSBC will be required to disclose short- and medium-term targets to align its lending and underwriting with the goals and timelines of the Paris Agreement.
The bank also will need to phase out the financing of coal-fired power plants and thermal coal mining in the European Union and Organisation for Economic Cooperation and Development markets by 2030, and do the same for the rest of the world by 2040.
Additionally, HSBC will have to report annually on the progress of its net-zero finance strategy and the plan to reduce its exposure to coal.
Since the Paris climate agreement was signed at the end of 2015, HSBC has helped arrange almost US$91 billion (S$122 billion) of bonds and loans for energy companies, excluding solar, wind and other renewable producers, the third most among European lenders, according to data compiled by Bloomberg.
"Net-zero ambitions have to be backed up with time-bound fossil fuel phase-outs and today HSBC has taken an important step in that direction," Ms Jeanne Martin, senior campaign manager at ShareAction, said in a statement.
"Our focus now turns to ensuring it delivers on these commitments."
