The pressure is working. A campaign led by ShareAction is forcing HSBC to phase out coal. It’s not perfect given the urgency of the crisis and there’s a way to go. But make no mistake, the global movement is pushing one of the world’s biggest banks to #DefundClimateChaos.

HSBC is one of Europe’s biggest funders of fossil fuels. It’s poured $110 billion into fossil fuels since the Paris Agreement. It’s also increased its funding of coal power and mining since 2016. That’s why campaigners across the world are pushing HSBC to stop funding the fossil fuel companies that are causing the climate crisis.

And it’s working. Earlier this year, ShareAction helped HSBC shareholders lead a shareholder resolution demanding that HSBC act faster to reduce their dirty investments. The threat of it made HSBC agree to cooperate. And after months of hard negotiations, HSBC are releasing their coal policy.

So what’s good about the policy?

HSBC is a banking giant and its coal policy had no restrictions on coal companies before. Now, the bank is bowing to pressure and putting in stronger measures to gradually stop financing the dirtiest fossil fuel. They’re also saying they  won’t fund companies expanding their coal projects. That means billions of dollars being diverted away from coal mines and projects. 

But the policies are not watertight

The measures don’t apply to its clients outside of Europe, for example in Asia, where the bank makes a lot of its money. This is massively worrying, given that these countries are experiencing the worst of climate destruction.

The bank’s commitment not to fund companies expanding their coal infrastructure also has one gaping loophole. It’s only counting plans that were announced after 1 January 2021, and so doesn’t include the string of coal plants agreed and contracted before this date. There’s a lot of them.

Gerry Arances, Executive Director of the Center for Energy, Ecology and Development (CEED) in the Philippines said:

“HSBC received plaudits back in March for announcing its intention to start ‘phasing-out’ the financing of coal globally, but its update today does nothing of the sort. It’s refusing to put meaningful restrictions on companies still building new infrastructure for the dirtiest fossil fuel in developing countries. It’s sacrificing our safety, clean air and water for more profit. The Philippines and neighbouring countries don’t need more coal, why won’t HSBC listen to us?”

Jeanne Martin, Senior Campaign Manager at ShareAction said:

“The fact that HSBC has introduced a coal phase-out policy is itself a victory for shareholder engagement with banks on climate. However, whilst an important step forward, the policy lacks the urgency and rigour required to avert the climate crisis.

“We welcome the progress HSBC has made since our engagement began, such as introducing coal-related corporate financing restrictions and extending its coal phase out commitment to its asset management arm. However, there are a number of disappointing loopholes in this policy, which allow for the continued financing of top coal companies and developers whose activities would take us past the 1.5C threshold.

“For example, HSBC’s definition of coal expansion allows it to continue financing companies building new coal projects, as long as these projects were announced before January 2021, while its corporate finance restrictions do not apply to existing clients outside the OECD, where it has the most exposure.”

HSBC’s policy is not perfect – but it shows progress. There’s no way HSBC would be doing this if only a few people demanded change. But restless work from campaigners is moving shareholders, the press, and the public. And it shows that even though the fight is huge, we can win it.