A bloc of HSBC shareholders have filed a resolution urging Europe’s largest bank to stop funding the fossil industry, with coal at the top of the list. Among these activist investors are the world’s largest publicly-traded hedge fund company and Europe’s largest listed asset manager.
Hedge fund firm Man Group PLC and asset manager Amundi SA are two of 15 institutional shareholders which, in partnership with 117 individual investors, are supporting the resolution, reports Bloomberg Green. This phalanx of stakeholders, which oversees a combined US$2.4 trillion in investments, is being led by UK-based ShareAction, a group that previously guided a 2010 campaign by 6,000 pension fund shareholders to force colossal fossils BP and Shell to reveal their exposure risks associated with tar sands/oil sands operations. That resolution did not pass, but the campaign is considered a watershed moment in the use of so-called “pension power” to effect change.
Now, on behalf of the HSBC shareholders, ShareAction is asking the bank “to publish a strategy to reduce its exposure to fossil fuel assets and set targets in line with the Paris Agreement.”
Along with a demand to reduce its exposure to coal, “the investors also asked HSBC ‘to consider the social dimension of the transition to a low-carbon economy’ when devising its strategy and to not ‘rely excessively’ on negative emissions technologies that remove carbon when developing targets,” writes Bloomberg.
The shareholder pressure comes three months after the London-based bank pledged to support the transition to a net-zero economy by prioritizing green financing and investments, a move that includes a “soft target” deadline of achieving a net-zero client portfolio by 2050.
Bloomberg adds that HSBC has also committed to making both its own operations and its supply chains net-zero by 2030.
Such commitments are long overdue, said ShareAction senior campaign manager Jeanne Martin. She noted that more and more investors are becoming aware of the extent to which the financial sector bankrolls the world’s biggest emitters.
What the HSBC shareholder resolution asks for, writes Bloomberg, are concrete details about how the bank plans to cut its exposure to fossils, details that are currently absent from its net-zero strategy.
“Such an ambition needs to be underpinned with a real transition plan and reflect the sense of urgency highlighted by climate science,” said Helen Price, stewardship manager at Brunel Pension Partnership, which has signed on to support the resolution. “Without a credible transition plan, the net-zero ambition isn’t a new and improved recipe for the bank, it’s just new packaging.”
Describing HSBC as “a critical player in emissions output and potential reductions,” Jason Mitchell, co-head of responsible investment at Man Group, told Bloomberg that if the bank commits to concretizing its ambition of being net-zero by 2050, it could “send an important signal to other fossil fuel financiers of the road ahead.”