Ask the UK's banks to get out of fossils

To: ukhelp@hsbc.com; customer.care.team@hsbc.com; sustainability@hsbc.com pressoffice@hsbc.com; investorrelations@hsbc.com (or send a letter to your nearest branch: https://www.hsbc.co.uk/branch-finder/)

Subject: Your Reputation Is At Risk: Align Your Portfolio With The Paris Agreement!

Dear Sir/Madam,

I am writing to you because I am concerned about HSBC’s vision for the future. There has never been as much evidence of the fatal impact of fossils as now, just like public calls to end their financing are louder than ever. Yet, HSBC currently has US $87 billion invested in fossil fuel companies.

According to a recent report by the NGO Rainforest Action Network, HSBC’s investments in fossil fuels have almost doubled since the Paris Agreement. The bank is Europe’s second largest investor in fossil fuels.

With COP26, the global climate summit, happening in Glasgow, all eyes will be on how HSBC tackles climate change. Hence, I am calling for HSBC to terminate all finance for fossil fuels promptly and align its portfolio to the Paris Agreement.

Looking forward to your prompt reply.

Sincerely,

Here is an email reply a fellow activist received from HSBC in response to their questions regarding the bank's fossil fuel investments:

Thank you for your email.

Let me set out our approach to the fossil fuel sector and its role in climate change.

We have long recognised the significance for climate change of fossil fuels and deforestation in particular.  This is why over recent years we have introduced, and continued to strengthen, our own sustainability risk policies focused on these areas.  Our Metals and Mining Policy states that we will not provide financial services for new thermal coal mines or new customers dependent on thermal coal mining.  We strengthened our Energy Policy when it was revised in April 2018.

When we updated our energy policy, we stated that we would not finance any new coal-fired power plants, recognising the need in Bangladesh, Indonesia and Vietnam to balance local humanitarian needs with the need to transition to a low carbon economy.

We therefore agreed to consider funding of new coal-fired power plants in those three countries, subject to certain strict criteria. It is important to note that we have not provided any project finance for any new coal-fired power plants anywhere in the world since then, including those countries.

We have now amended our policy to remove this exception and will not finance any new coal-fired power plants anywhere globally. We continue to support the other needs of our customers in those countries and continue to support their governments.

We know it is not only coal mining that matters: our April 2018 Energy Policy alsoexcluded finance for new offshore oil or gas projects in the Arctic, new greenfield oil sands projects, and new large dams for hydro-electric projects inconsistent with the World Commission on Dams Framework.

We recognise there is a critical role for regulators around the world in encouraging the financial sector to address the implications of climate change.  As well as supporting – and reporting in line with – the TCFD, we are playing our part in various industry initiatives, for example as a member of the FCA and PRA's Climate Financial Risk Forum, where we are chair of the climate risk working group.  We fully support the planned climate change-related stress tests for banks.

Disclosure is particularly important, and we need to ensure that all sector-specific exposures are aligned in methodology precisely with those provided within TCFD.  For a second year, we have disclosed our wholesale loan exposure to transition risk sectors, and we have started to develop and publish new transition metrics, as well as exploring what further insight data can provide.  In next year's TCFD disclosure, we intend to disclose more qualitative information on our approach to climate stress testing.

At the same time as reducing our exposure to the 'bad', we know that the finance sector has a significant role to play in shifting investment to the 'good'.  We were pleased to be recognised in 2019 by Euromoney as the World's Best Bank for sustainable finance, and we finished the year as the world's largest underwriter of green, social and sustainability bonds – helping clients raise US$19.2 billion in 2019, almost double the previous year.  We committed in 2017 to provide US$100bn in sustainable finance by 2025 and, at the end of 2019, we had already delivered US$52.4bn, a figure that includes green, social and sustainability activities.

We believe that transition to a low-carbon economy will be one of the biggest drivers of global investment in future.  Business has a critical role to play, and we are absolutely committed to working closely with our customers, regulators and governments to accelerate progress towards a cleaner and more sustainable world. We have a duty to manage the impact of our business on the environment, at the same time as promoting economic growth in both developed and emerging markets.

Thank you again for writing, and I hope this response demonstrates that we do take the issues you raise seriously, and that you might reconsider your decision to leave HSBC.

Should you receive a similar reply from HSBC in response to your inquiry, feel free to use any information from the following text as a follow-up:

There are a lot of examples that prove how inefficient HSBC's project exclusion is, both in terms of coal, as well as regarding all fossils. Urgewald's data shows that HSBC financed companies building new coal plants with almost $8 billion in the last 3 years: https://coalexit.org/investments-bank-ct?name=HSBC (underwriting and loans) and https://coalexit.org/investments-investor?name=HSBC

Together, the coal expansionists HSBC is funnelling money to are planning to add a total 107GW to the global coal-fired power pipeline.

When it comes to financing the expansion of all fossils, HSBC is in the top 15 global banks with a whopping $33 billion since 2016. If you look at this table (taken from Rainforest Action Network's March report "Banking on Climate Change"), HSBC has almost doubled its investments in fossil fuel expansionists since the Paris Agreement.

Concrete questions to ask HSBC could be:

- When are they planning to quit financing not just fossil fuel projects, but more importantly the companies themselves driving these projects forward?
- When is HSBC planning to release a policy that contains dependable phase-out dates as well as strict exclusion criteria for fossil fuel companies in general, not just exclusion on a project-level?

To: https://bank.barclays.co.uk/olb/authlogin/contactUsContainer.do#/contactUs; privateshareholderrelations@barclays.com; (or send a letter to your nearest branch: https://www.barclays.co.uk/branch-finder/)

Subject: Your Reputation Is At Risk: Align Your Portfolio With The Paris Agreement!

Dear Sir/Madam,

I am writing to you about the harmful impact of Barclays' investments in fossil fuel companies on public health, the environment and the global climate. In the most recent energy policy that came out end-March, Barclays commits to a “just transition towards an environmentally sustainable economy”. This is a laudable pledge, however, it lacks ambition. To contribute to decarbonising the economy, Barclays needs to align its portfolio to the Paris Agreement and the 1.5° goal. The new policy is not sufficient to make this happen.

It allows Barclays to continue financing companies with a revenue of 10% from coal mining or burning in 2030. By then, coal needs to be phased out in Europe in order to meet the goals set in the Paris Agreement. Moreover, Barclays can keep financing Coal Plant Developers like South Korean KEPCO, that is developing over 6 GW of new coal plants in South Korea, South Africa, Indonesia, Japan, Philippines and Vietnam - countries vulnerable to climate change. Such a company has no place in the portfolio of a bank that pledges to support a "just transition towards an environmentally sustainable economy".

Barclays is currently Europe's biggest investor in fossil fuel companies. I am hereby asking you to introduce dependable and efficient fossil fuel companies to exclude the world's polluters from your portfolio. I would also like to inquire about the CO2 impact of your portfolio.

Looking forward to your prompt reply.

Sincerely,

This is an email response from Barclays a fellow activist received after reaching out to the bank to inquire about their fossil fuel businesses. Feel free to use any of the information we have provided in the suggestion for a follow-up email below.

Thank you for your email regarding your concerns about climate change – which we share and take very seriously at Barclays. We welcome the opportunity to engage with shareholders and customers on these important topics.

As you will have seen in our recent announcement, Barclays has made two very important and ambitious steps forward in an effort to be leaders in tackling the climate crisis. First, we have made a commitment to align our entire portfolio – all of our banking activities – to the goals and timelines of the Paris Agreement. We have also announced a new ambition is to become a net zero bank by 2050, across all of our direct and indirect emissions (Scopes 1, 2 and 3). Our net zero ambition is aligned with the UK Government's target to bring all greenhouse emissions to net zero by 2050. However, we recognise that even though the ultimate deadline for this effort is three decades away, immediate and ambitious action is required from all actors in order to limit global temperature increases to the levels outlined in the Paris Agreement. So, we are progressing on a range of activities across our areas of greatest climate impact in order to achieve this.

In terms of our Scope 3 emissions – that is, the emissions arising as a result of the activities we finance – we are one of the very first banks to make a commitment in this area. And, we wanted to be very thorough, so we have made sure the commitment applies across our lending (which many banks are considering) as well as our underwriting (which makes us a leader among our peers), and across all sectors, making sure we start with energy and power utilities, and moving on to other carbon intensive industries after that, such as transportation, manufacturing, and agriculture. We are currently developing a sophisticated methodology that will allow us track the emissions associated with our financing and establish detailed targets which will allow us to deliver on our Paris alignment commitment.  We have already published indicative goals for two key industries: 30% reduction in CO2 intensity in our power portfolio and 15% reduction in CO2 intensity in our energy portfolio by the end of 2025.  We are working on a much more complete set of targets which we will make public in November, and we will report progress against those targets every year.

Another important part of our approach is our position on the fossil fuel industry, including thermal coal, which you mention in your email. We have committed to the steady reduction in any thermal coal financing, so that we will only provide finance to entities whose thermal coal activities represent less than 10% of revenue by 2030. We believe that this residual revenue of 10% will enable us to continue supporting clients who are committed to the Paris Goals through their transition, where a small, legacy element of their overall portfolio is perhaps taking a bit longer to phase out.  We will engage closely with these companies, and there may be some clients who, if they cannot transition entirely, will not be financed. Barclays' thermal coal policy is made significantly more restrictive by being applied at a legal entity level, rather than at a group/parent level. That means, every individual transaction is assessed for coal exposure, so we avoid the financing of majority coal assets or expansion activities, even if a parent company is below our revenue percentage threshold.

As a result of the above activities, we expect our financing of fossil fuels to decrease over the coming years, as we align our portfolio to the Paris Agreement.

You can find more detail on our recent climate change announcement in our 2019 Environmental Social Governance Report.  We hope that this information helps to alleviate your concerns and that you will continue banking with Barclays.

Our suggestion for a follow-up email you can send to Barclays if you receive a similar response as the one above:

These are the follow-up questions you could ask Barclays:

- When are they planning to install important intermediary phase-out dates, seeing as 10% by 2030 or net zero by 2050 are not even close to enough?

- When are they planning to add important coal exclusion criteria beyond coal share of revenue, specifically coal share of power production and total annual coal production, as well as companies expanding their coal operations?

- What are their concrete plans to exclude other fossil fuel companies, specifically the oil & gas sector?

As much as they are trying to elaborate on their commitment to "net zero" and climate accountability, the reality is that Barclays is still Europe's biggest investor in fossil fuels. Feel free to use any of the below information to bolster your response to the bank:

The data was taken from the Rainforest Action Network's 2020 report Banking on Climate Change.

When it comes to coal, a topic the bank also gave you a detailed reply on, our Global Coal Exit List data (this first link is for Barclays underwriting and loans and here the view for Barclays shareholding for coal companies) shows that Barclays is financing some of the world's most aggressive coal plant expansionists and mining giants like Adani, Eskom, Uniper and NTPC. Barclays' total investments in the coal sector alone since 2017 are a whopping $7.9 billion.

Barclays' policies and exclusion criteria are not strict enough, their deadlines (net zero by 2050, 10% coal share of revenue by 2030) are too late. This means for example that a coal company like NTPC, which has a thermal coal share of revenue of 90% and plans to expand its coal business to add 32 Gigawatts of coal-fired capacity to the global pipeline, could still remain in Barclays' portfolio for another 10 years. What we would need is a threshold of for example maximum 30% coal share of revenue now with additional intermediary steps over the next few years with 0% coal share of revenue by 2030. Also, Barclays currently only limits coal share of revenue and not coal share of power production. This means that big power companies that burn large amounts of coal to generate and sell electricity are not affected by Barclays' coal share of revenue criteria.

For an overview of the fossil fuel companies Barclays is currently supporting, please have a look at the list we compiled: https://urgewald.org/barclays-dirty-investments. You can get more information about the individual projects and companies by clicking on the individual descriptions.

What is far more concerning about Barclays' policy however, is that they have hardly made any commitments when it comes to fossil fuels other than coal. Barclays is one of Europe's biggest investors in ExxonMobil. Exxon is currently driving forward one of the biggest drilling projects of our time in Guyana: https://urgewald.org/medien/world-bank-paves-way-carbon-bomb-drilling-project-guyana

On a side note: Barclays' latest policy update states partial project finance exclusion for fracking, however only in the UK and the EU: https://shareaction.org/wp-content/uploads/2020/03/Barclays-Energy-Policy.pdf (pages 3 and 4). This means that the world's most important fracking areas, for example in the Americas, are not affected by Barclays' policy update.

To: Straight2bank.uk@sc.com social.media@sc.com

(or send a letter to the London office: Standard Chartered Bank, 1 Basinghall Avenue, London, EC2V 5DD)

Subject: Your Reputation Is At Risk: Align Your Portfolio With The Paris Agreement!

Dear Sir/Madam,

I am writing to you because I am very concerned about Standard Chartered’s vision for the future. On the Standard Chartered website you are stating the following: “considers climate change as one of the greatest challenges facing the world today”. This is laudable, but it needs to be followed by actions. To contribute to decarbonising the economy, Standard Chartered has to align its portfolio to the Paris Agreement and the 1.5° goal.

Despite various policies, Standard Chartered continues to finance climate destructive companies such as Adani and NTPC. The Indian Adani Group is most infamous for its highly controversial mega-mine expansion plans in Australia. If it went ahead, Adani’s Carmichael mine and its coal would wreck the climate, deplete groundwater, trash Indigenous rights and irreversibly damage the Great Barrier Reef.

NTPC is the world’s top coal plant developer and has a long history of abusing environmental and human rights in India. But in recent years its notoriety has grown internationally due to its ongoing construction of the Rampal coal plant in Bangladesh, which threatens the world’s largest mangrove forest, the Sundarbans, which are also a UNESCO World Heritage Site.

COP26, the global climate summit will be taking place in Glasgow. This means that all eyes will be on what UK banks and thus Standard Chartered do to tackle the climate crisis. Please align Standard Chartered’s portfolio to the Paris Agreement.

Looking forward to your prompt reply.

Sincerely,