Jesuits in Britain file for climate resolution at HSBC

Brother Stephen Power SJ, Chair of the Management Board for Jesuit Missions and Manager of the Jesuits in Britain’s ethical investment strategy, is working with a diverse group of 14 other institutional investors backing ShareAction’s call for HSBC to reduce its exposure to fossil fuels.

Fifteen institutional investors, with a combined US $2.4 trillion in assets under management, have filed a climate change resolution at HSBC. The resolution, co-ordinated by responsible investment NGO ShareAction, calls on HSBC to publish a strategy and targets to reduce its exposure to fossil fuel assets, starting with coal, on a timeline consistent with the Paris Agreement climate goals.

In a sign of the growing appeal of climate resolutions for mainstream investors, the group of co-filers includes Europe’s largest asset manager, Amundi, the world’s largest publicly traded hedge fund company, Man Group, as well as asset managers and asset owners from the UK, Denmark, France, and Sweden.

HSBC is Europe’s second largest financier of fossil fuels, after Barclays, according to the Rainforest Action Network (RAN). RAN found it had provided US $87 billion to some of the world’s largest fossil fuel companies since the signing of the Paris Agreement (2016-2019). In October 2020, HSBC announced an ambition to be a net zero bank by 2050 at the latest, an important move given the bank’s strong exposure to Asia. But the announcement was criticised by investors and campaigners for making no commitment to reduce HSBC’s funding for fossil fuels, in particular coal, which has risen each year since 2016. 

Analysis by ShareAction showed that in the four months leading up to its announcement, the bank pumped an additional US$1.8bn into fossil fuel companies, including those constructing new infrastructure for coal and tar sands. These findings cast serious doubt over the credibility of HSBC’s climate commitments, given that phasing out financing of fossil fuels is an absolute must for any net-zero strategy.

Br Stephen Power SJ said: “The Jesuits in Britain have banked with HSBC for many years and it’s time the multinational joined the growing social movement to safeguard the future of our younger generations. Echoing Pope Francis’s appeal to companies to move from fossil fuels to renewable energy, we are simply asking HSBC to encourage the companies it supports financially to move towards a low carbon economy. 

If the resolution receives more than 75% of the votes at HSBC’s AGM in April 2021, it would require the bank 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.

The resolution follows in the footsteps of ShareAction’s January 2020 resolution at Barclays – the first ever climate resolution backed by institutional investors at a major European bank. Barclays responded to that resolution by tabling its own and becoming the first mainstream bank to commit to net zero by 2050 at the latest.

Shareholders filing the HSBC resolution have signalled their hope that the board recommends a vote in favour of the resolution at its April 2021 AGM.

Jeanne Martin, Senior Campaign Manager at ShareAction, said: “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 1.5°C. If HSBC is serious about its net zero ambition, it will support this resolution.”

Jason Mitchell, Co-Head of Responsible Investment at Man Group, said: “As Europe’s largest bank and the second largest provider of fossil fuel financing, HSBC has the unique opportunity to help lead the financial services sector towards Paris-aligned commitments rather than mere ambitions. As shareholders supporting this resolution, we recognise the imperative and urgency for establishing targets and a timeline towards emissions reductions.”

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