A group of HSBC Holdings Plc investors want the bank to set a renewable energy funding target amid concerns its current green pledges are too vague.
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(Bloomberg) — A group of HSBC Holdings Plc investors want the bank to set a renewable energy funding target amid concerns its current green pledges are too vague.
It is part of a list of demands that includes a call for Europe’s largest bank to detail how it will reach its sustainable financial target of up to $1 trillion. Shareholders, who collectively have more than $890 billion in assets under management, include Royal London Asset Management, Axiom Alternative Investments and La Francaise Asset Management. The initiative was coordinated by the British non-profit organization ShareAction.
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They plan to raise their demands 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 renewable energy capacity must be tripled by 2030 to meet the goal of limiting global warming to the critical threshold of 1.5°C.
Many of the world’s largest banks have told the public that they are committing trillions of dollars to sustainable finance, but have provided limited documentation to support these claims. Bloomberg News previously reported that the targets include significant accounting differences and give banks plenty of leeway to set their own guardrails.
HSBC’s current sustainable finance target of $750 billion to $1 trillion by 2030 is worded in such a way that “investors do not have enough information about exactly how this is being spent to know whether the bank is actually spending.” “It is a fair share of financing to address climate finance gaps,” said Jeanne Martin, head of the banking program at ShareAction, in an email.
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It “gives the impression that the bank is increasing its green finance efforts without demonstrating what difference it will make or whether it is funding the green activities that are most needed,” she said.
HSBC plans to answer all of ShareAction’s questions at the annual meeting, a spokesman for the bank said.
In its annual report published in February, HSBC said it had provided and facilitated $268 billion in sustainable financing and nearly $27 billion in ESG and sustainable investments since the start of 2020. This included 38% of the proceeds for green financing and 26% for sustainability-related financing.
Further progress towards its sustainable finance and investment goal “depends on market demand for the products and services,” HSBC said.
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