HSBC asked by US$890 billion investor group to set new energy goal

A GROUP of HSBC investors wants the bank to set a funding target for renewable energy amid concerns its current green pledges are too vague.

It’s part of a list of demands that includes asking Europe’s biggest bank to spell out exactly how it plans to hit a sustainable-finance target of up to US$1 trillion. The shareholders, who together have more than US$890 billion of combined assets under management, include Royal London Asset Management, Axiom Alternative Investments and La Francaise Asset Management. The initiative was coordinated by UK nonprofit ShareAction.

They plan to put their demands forward at HSBC’s annual general meeting on Friday, according to an emailed statement. The call for a renewable energy target follows an assessment by the International Energy Agency that to achieve the goal of limiting global warming to the critical threshold of 1.5 deg C global, renewable power capacity needs to triple by 2030.

Many of the world’s biggest banks have told the public they’re committing trillions of dollars to sustainable finance, but have provided limited documentation to back up such claims. Bloomberg News has previously reported that the targets span significant accounting differences, leaving banks a lot of leeway to set their own guardrails.

HSBC’s current US$750 billion to US$1 trillion sustainable-finance goal for 2030 is formulated in such a way that “investors don’t have enough information about how exactly this will be spent to know if the bank is really on the path to net zero and contributing its fair share of financing to address climate finance gaps,” Jeanne Martin, head of banking programme at ShareAction, said in an email.

It “gives the impression the bank is scaling up its efforts on green finance without demonstrating the difference it will make, or whether it is financing the green activities that are most needed,” she said.

HSBC plans to answer all of ShareAction’s questions at the annual meeting, said a spokesperson for the bank.

In the annual report published in February, HSBC said it has provided and facilitated US$268 billion of sustainable finance and almost US$27 billion of ESG and sustainable investing since the beginning of 2020. This included 38 per cent where the use of proceeds were dedicated to green financing and 26 per cent to sustainability-linked financing.

Continued progress towards achieving its sustainable finance and investment goal is “dependent on market demand for the products and services” HSBC said. BLOOMBERG