HSBC doubles down on unwavering commitment to coal - Bank On Our Future

HSBC doubles down on unwavering commitment to coal

Spoof HSBC advert on London Underground, saying 'We are climate breakdown'

“Coal is such a fundamental part of power generation in many developing countries where we operate that we do not think it is the right thing, from a social or economic perspective, to withdraw.”

 

You’d be forgiven for thinking that these are the words of a hardened coal baron intent on exploiting all possible coal reserves from developing countries.

 

They are in fact the words of Daniel Klier, HSBC’s global head of sustainable finance, in 2017.

 

Over three years later, not much has changed about the bank’s position on coal in the developing world, apart from it’s a bit less obvious in its phrasing.

 

Last week, HSBC’s chairman Mark Tucker spoke at the Asian Financial Forum to say excluding coal finance “is not the best option for the environment or for the people and the communities that rely on these traditional industries.”

 

Actually, it is.

 

As Lidy Nacpli from Asian Peoples’ Movement on Debt and Development told us: “The finance sector is propagating the myth that Asian countries depend on coal power for affordable energy but this is an outdated, illogical and dangerous assertion. It has already been established for several years that renewable energy is a viable, accessible and as low-cost if not cheaper alternative… Rapid just transition away from coal and fossil fuels must be pursued immediately.”

 

It’s deeply worrying that over three years later the bank has no intention of leaving fossil fuels in the ground and continually funds their exploitation. More worrying still, HSBC sees its continued financing of fossil fuel companies on their supposed pathway to decarbonisation as its most significant contribution to addressing climate change.

 

It actually thinks that financing fossil fuels is part of the solution to climate change.

 

Tucker thinks that ‘divesting’ from these companies would just force them to do business with other banks. But this rhetoric feels a little like he’s worried about losing business to other banking competitors in Asia, which is a key growth market for the bank.

 

We need all banks to refuse to finance fossil fuel companies on a timeline consistent with the Paris Agreement, which HSBC supports. Tucker also drastically misrepresents the demands of investors and NGOs, by saying that ‘overnight divestment’ is not the answer.

 

No one is calling for overnight divestment. The shareholder resolution filed by investors and coordinated by ShareAction calls for a phase-out of fossil fuels, starting with coal, that begins now. Coal must be out of the energy mix by 2030 at the very latest.

 

This over-simplification of the climate movement’s demands does not offer the comfort that HSBC grasps the urgency of the moment we are in, nor does it grasp the seriousness of the net-zero commitment it has made.


The UK’s banks can fund our future and aid the global green recovery. Together, we can push the worst fossil banks to change.