The good news is that shareholders voted overwhelmingly in favour of more ambitious policies on financing for coal and other high-carbon industries – the resolution passed with 99.71% of the vote. As a result, HSBC is now legally obliged to end coal financing and set targets that align with the 1.5ºC goals of the Paris Agreement for its lending and underwriting activities.
The bad news is that shareholders asked a number of questions about the bank’s role in companies which are expanding their fossil fuel operations and executives fluffed their answers.
It was the perfect opportunity for chair Mark Tucker and CEO Noel Quinn to lay out a bold new vision, explaining how they intend to steer HSBC towards zero fossil fuel financing. Instead, when challenged about the relationship with Saudi Aramco – the world’s biggest climate polluter with a terrible human rights record – Tucker only said that they have “a responsibility to remain engaged”.
Other questions about specific projects were stonewalled, the executives hiding behind claims of client confidentiality. On a gas project in Mozambique which is connected to violence and human rights abuses, HSBC would neither confirm nor deny any involvement, only that the project would provide the region with economic opportunities.
For more examples of obfuscation and avoidance, check out the Twitter thread from Jeanne Martin of ShareAction.
Tucker and Quinn did acknowledge the bombshell from the highly-regarded International Energy Authority (IEA), which said recently that in order to meet net-zero goals by 2050 there must be no more expansion of coal, oil and gas. HSBC has agreed to these goals and Tucker said at the meeting that the bank is aligned with the IEA’s directive. But based on the vague and elusive responses to concerned shareholders, HSBC is a long way from achieving those goals.
With the climate resolution passed, HSBC is now obliged to produce a plan which delivers an end to coal financing and meeting the 1.5ºC targets. This means saying it will stop funding any company expanding the fossil fuel industry.
Given how reluctant its top executives were to create distance between the bank and fossil fuel companies, we’ll need to be ready to call out any attempts at watering down that plan.