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HSBC to end coal financing by 2040 after facing pressure from investors

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HSBC said on Thursday that it would end financing of coal mining and coal-fired power plants in the European Union and countries that make up the Organisation for Economic Cooperation and Development (OECD) by 2030, and a decade later elsewhere, following pressure from investors.

The London-based bank said it would propose a special resolution on climate change and outline its ambitions to reduce carbon emissions to net zero in its loan portfolio by 2050, at its annual meeting in May.

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The bank, the largest of Hong Kong's three currency-issuing lenders, said it would set a "clear, science-based" strategy with short and medium-term targets to align its lending to goals set out as part of the Paris Agreement on climate change. It will also report on its progress beginning with the 2021 annual report next February.

The resolution follows months of negotiations with ShareAction, a UK-based responsible investment charity, and a group of 15 institutional investors with a combined US$2.4 trillion in assets under management, including asset manager Amundi and hedge fund manager Man Group.

HSBC Chairman Mark Tucker. Photo: Handout alt=HSBC Chairman Mark Tucker. Photo: Handout>

Martin said it was a "significant" commitment by the bank, given it provided a purported US$15 billion in overall financing to coal developers and users, such as power generators, between 2018 and 2020.

Shares of HSBC rose 0.7 per cent to close at HK$46.90 in Hong Kong on Thursday.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.