HSBC shareholders call for transparency in sustainable finance planning

HSBC has established a goal of allocating up to $1trn to sustainable finance by 2030.

Today (3 May), a statement will be read at the annual general meeting (AGM) of the bank on behalf of the coalition by responsible investment non-profit ShareAction.

The investor consortium, with assets under management, totalling $892bn, comprises the Ethos Foundation, Epworth Investment Management, Royal London Asset Management, Axiom Alternative Investments, La Francaise Asset Management, Jesuits in Britain and Folksam pension fund.

HSBC has established a goal of allocating up to $1trn to sustainable finance by 2030. However, ShareAction contends that investors lack sufficient details regarding the specific allocation of these funds.

Consequently, the organisation highlights there’s uncertainty about whether the bank is genuinely progressing towards achieving net-zero emissions and fulfilling its equitable role in financing efforts to address climate finance gaps.

In November of last year, ShareAction released an evaluation of green finance and reporting by Europe’s leading banks, including HSBC. The analysis revealed that insufficient transparency regarding sustainable finance assertions exposed banks to allegations of greenwashing.

ShareAction’s head of banking programme Jeanne Martin said: “The $1trn 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.”

HSBC has been in the headlines for greenwashing, when the UK’s Advertising Standards Authority (ASA) banned two of its out-of-home adverts on the grounds that their environmental claims could be misleading.

One of the adverts stated HSBC’s aim to finance the planting of two million trees in the UK, in partnership with the National Trust, and the other highlighted its plan to finance a billion of dollars of low-carbon activities this decade.

Martin added: “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 recent study revealed that out of more than $2.5trn in loans and bonds extended to the energy sector by 60 banks between January 2016 and July 2022, $2.3trn supported fossil fuel production, while just $178bn went to renewables.

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