HSBC Holdings Plc will stop financing the expansion of thermal coal from funds it manages actively with immediate effect, Reuters reported, marking an acceleration of a broader commitment it made last year.
In a new 10-point plan, HSBC Asset Management, which oversees around $600 billion in assets, said it would immediately stop investing in listings or primary debt issuance of any company engaged in thermal coal expansion, the report said.
HSBC said last December it would cut exposure to thermal coal financing, across all its businesses including asset management, by at least 25% by 2025 and 50% by 2030, though non-EU or non-OECD-based clients could be funded until a global phase-out by 2040.
The number of companies in the bank's investment portfolio that have so far confirmed plans to expand their exposure to thermal coal was "relatively small", the report cited Erin Leonard, HSBC asset management's head of sustainability as said.
HSBC said it will have engaged with all listed companies in its actively managed portfolios with more than 10% of revenues from thermal coal by next year.
For companies in its active funds with more than a 10% revenue exposure to thermal coal, all initial public offerings and primary debt issuance would be subject to "enhanced due diligence" of the company's plan to transition to net-zero, according to HSBC.
By the end of 2030, the group's active portfolios would hold no listed securities of companies reliant on coal for more than 2.5% of revenues in the European Union or OECD markets; and that would be expanded to all markets by 2040.
When it comes to holding the boards of companies with significant thermal coal exposure to account, HSBC said its fund arm would vote against the election of board chairs at companies planning to expand production and use of thermal coal.
Chairs at companies with more than 10% revenue exposure, and which do not provide acceptable reporting on climate risk, or where transition plans remain weak after a period of engagement, would also face being opposed when they seek re-election.
(Writing by Emma Yang Editing by Harry Huo)
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