To: firstname.lastname@example.org; email@example.com; firstname.lastname@example.org email@example.com; firstname.lastname@example.org (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!
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.
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?