Prior to the Annual General Meeting (AGM), HSBC is facing shareholder pressure regarding its plans for green finance. ShareAction, a charity promoting responsible investment, is scheduled to present a statement at Friday’s meeting on behalf of a group of concerned shareholders.
The coalition of shareholders is urging the bank to provide a detailed outline of how it intends to utilise the $1 trillion (£799 billion) allocated to green finance by 2030. They argue that the current lack of clarity makes it difficult for them to determine if HSBC is genuinely working towards achieving net zero emissions or simply addressing climate finance gaps.
ShareAction is also calling for the board to establish an investment target for renewable energy. The upcoming AGM, set to take place at the InterContinental London O2 on Friday, is happening following the unexpected retirement announcement of CEO Noel Quinn. Speculations about his successor, as well as deliberations about a resolution to lift the cap on bankers’ bonuses in light of last year’s government regulations change, are also expected to be discussed.
Addressing the topic of green finance, Jeanne Martin, Head of Banking Programme at ShareAction, stated, “The target as it currently stands is too broad and vague.” She also expressed, “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.”
The call for more transparency on green finance spending was made by 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, through ShareAction.
This development comes after 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 open to accusations of greenwashing. The report also revealed insufficient 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.
In response to the shareholder concerns, an HSBC spokesperson stated, “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.” The spokesperson assured that all questions will be addressed at the AGM and highlighted the bank’s ambition to deliver $750 billion to $1 trillion of sustainable finance and investments by 2030, along with detailed progress reports in their annual report.
In conclusion, the pressure on HSBC to provide greater clarity on its green finance strategy underscores the growing focus on corporate responsibility and sustainable investment. As shareholders and advocates continue to push for transparency and accountability, it is evident that the impact of financial institutions on environmental and social issues is increasingly under scrutiny.