HSBC set to face pressure on climate commitments at shareholder meeting

HSBC is set to face pressure from shareholders and activists to strengthen its climate commitments.

The UK’s largest bank will be challenged to restate its commitment to net zero at its annual general meeting in London on Friday.

A representative of ShareAction, which campaigns for responsible investment, plans to read a statement, signed by 30 investors after the lender weakened a key climate target earlier this year.

In its annual results published in February, HSBC revealed it pushed back its goal to reduce planet-heating emissions caused by its operations and supply chain by 20 years.

The banking giant set an interim goal in 2020 to achieve net zero across its own operations and supply chain by 2030, compared with where it was in 2019 as a baseline year.

But it will now aim to meet this goal by 2050.

And in a move that could prove more significant for its climate ambitions, HSBC also announced a review of its 2030 targets to reduce emissions caused by its financing of polluting firms.

The group of investors, which includes Nest Corporation, Trinity College Cambridge and Rathbones Investment Management, are calling on the board to use its announced review of climate targets to build on progress rather than backtrack.

The bank is also facing accusations that it potentially broke its own rules on coal financing by helping to raise one billion dollars (£0.75 billion) for the mining giant Glencore.

The investigation from the Bureau of Investigative Journalism (TBIJ) and The Independent, published on Thursday, found that in May 2023 the bank helped raise one billion dollars for Glencore, which had been increasing coal production for the previous two years.

This was despite the bank pledging in 2021 to stop funding firms that were increasing production “as soon as possible”, according to the report.

Jeanne Martin, head of the banking programme at ShareAction said: “After dropping its chief sustainability officer from its executive committee and announcing plans to review its climate targets and policies in February, HSBC has sent deeply concerning signals around whether managing the rapidly multiplying financial risks of global heating is still one of its priorities.

“As one of the largest banks in the world with exposure across Europe and Asia, HSBC is even more vulnerable than some of its European peers to climate risks, such as the effects of extreme weather, which are already impacting the lives and livelihoods of communities across the world.

“Despite this and having shown climate leadership in the past by stopping finance for new oil and gas projects, responsible investors have now been left in the dark on just how committed the bank remains to playing its significant part in securing the long-term prosperity of our global economy.

“This group of investors is calling on the bank to urgently affirm it will continue to build on its existing climate progress rather than backtrack, and to undertake this process in dialogue with shareholders. If the bank fails to do so it should not expect shareholders to remain silent.”

ShareAction said it will also ask questions calling for the bank to confirm it plans to continue holding in-person AGMs, following recent reports that the bank is considering meeting entirely online.

The group also plans to challenge the board on the impact of liquefied natural gas projects on indigenous communities and the environment in the Rio Grande valley in Texas.

The HSBC board will respond to ShareAction’s question at the AGM.

On the TBIJ story, a spokesman said: “We follow a clear set of sustainability risk policies which support our ambition to align the financed emissions in our portfolio to net zero by 2050.

“We do not comment on client relationships.”

PA has contacted Glencore for comment.