LGPS funds call on HSBC to reduce fossil fund assets exposure

The resolution, co-ordinated by ShareAction, calls on the banking group to publish a strategy and targets to reduce its exposure to fossil fuel assets, starting with coal, on a timeline consistent with the Paris climate goals.

According to the responsible investment non-governmental organisation, the group of co-filers, with $2.4tn (£1.8tn) in assets, includes Amundi, Europe’s largest asset manager, Man Group, the world’s largest publicly traded hedge fund company, alongside 117 individual shareholders.

Analysis from the Rainforest Action Network suggests HSBC is Europe’s second largest financier of fossil fuels, after Barclays, having provided $87bn to some of the world’s largest fossil fuel companies since the signing of the Paris agreement.

In October, the banking group pledged to reduce financed emissions from its portfolio of customers to net-zero by 2050 or sooner, in line with the goals of the Paris agreement.

However, analysis by ShareAction showed that in the four months leading up to its announcement, the bank pumped an additional $1.8bn into fossil fuel companies, including those constructing new infrastructure for coal and tar sands, it stated.

If the resolution receives more than 75 per cent of the votes at HSBC’s annual meeting in April 2021, it would require the banking group to publish a strategy and short, medium and long-term targets to reduce its exposure to fossil fuel assets on a timeline aligned with the goals of the Paris agreement.

Jeanne Martin, senior campaign manager at ShareAction, noted that the message “from the resolution is clear: net-zero ambitions by top fossil fuel financiers are simply not credible if they fail to be backed up by fossil fuel phase-out plans”.

“Five years after the Paris agreement was signed, HSBC continues to pour billions into the coal sector, a behaviour that is at odds with limiting global warming to 1.5C. If HSBC is serious about its net-zero ambition, it will support this resolution,” she added.

In response, an HSBC spokesperson said: “HSBC is strongly committed to addressing climate change, in line with our clear ambition to align our financed emissions of our entire business portfolio to net zero by 2050 or sooner.

"We are a leader in sustainable finance and expect to provide between $750bn and $1trn in finance by 2030 to support our customers in all sectors to progressively decarbonise. As we work to set out the detail of our roadmap to net zero, we continue to positively engage with our customers, shareholders and ShareAction.”