Ahead of its Annual General Meeting (AGM), HSBC is feeling the heat from shareholders regarding their green finance plans. ShareAction, a charity campaigning for responsible investment, is set to deliver a statement at Friday’s meeting on behalf of a group of shareholders who are concerned about transparency issues.
The shareholders’ coalition wants the bank to clearly outline how it plans to spend the $1tn (£799bn) dedicated to green finance by 2030. They claim that current ambiguities prevent them from establishing whether HSBC is genuinely paving the way to net zero emissions or simply financing enough to tackle climate finance gaps.
Also on the AGM agenda is a call by ShareAction urging the board to set an investment target for renewable energy. The AGM, happening at the InterContinental London O2 on Friday, takes place in the wake of CEO Noel Quinn’s unexpected retirement announcement.
Speculation will undoubtedly circulate about his successor, as well as discussions involving a resolution to lift the cap on bankers’ bonuses following last year’s change in government regulations. Commenting on the green finance topic, Jeanne Martin, ShareAction’s Head of Banking Programme, remarked: “The target as it currently stands is too broad and vague.”
“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.”
“This is why we are calling on the bank to make it clear how its green finance target will be spent across environmental and social themes, with a specific target for renewable energy that demonstrates how it is shifting its financing to support the energy transition.”
A coalition of investors overseeing nearly a trillion dollars in assets under management, including the Ethos Foundation, Epworth Investment Management, Royal London Asset Management, Axiom Alternative Investments, La Francaise Asset Management, Jesuits in Britain, and Folksam pension fund, made the request through ShareAction.
This development follows ShareAction’s analysis in November, which revealed a “structural lack of transparency” in the green finance activities of Europe’s 20 largest banks, leaving them susceptible to accusations of greenwashing.
The report also highlighted inadequate reporting on whether the green financing was for new assets or existing projects, with HSBC reporting that 77% of its 2022 green bond allocation went to existing projects.
An HSBC spokesperson responded: “We thank ShareAction for its engagement over a number of years on a range of topics relating to our climate strategy, and for recognising the good progress that we have made.”
“We will be answering all their questions at our AGM and note in 2020, we outlined an ambition to deliver 750 billion to 1 trillion dollars of sustainable finance and investments by 2030, and since then have reported our progress in our annual report with a detailed breakdown across green, sustainable (which combine green and social) and social products.”
