HSBC facing shareholder pressure over green finance ahead of AGM

HSBC is facing pressure from shareholders over green finance ahead of its annual general meeting (AGM).

ShareAction, which campaigns for responsible investment, said it plans to read out a statement at the meeting on Friday on behalf of a coalition of shareholders amid transparency concerns.

The charity said it will ask the British bank to set out how exactly they intend to use the 1 trillion US dollars (£799 billion) they have pledged to spend on green finance by 2030.

It added the lack of transparency means shareholders are unable to assess whether the bank is on the path to net zero or contributing its fair share of financing to address climate finance gaps.

The investor group will also urge the board to set a funding target for renewable energy, ShareAction said.

The meeting, which will take place at the InterContinental London O2 on Friday, comes after chief executive Noel Quinn’s surprise retirement announcement earlier this week.

Shareholders will likely question the board on the hunt for his replacement and vote in favour of a resolution which will remove a cap on bankers’ bonuses after the Government changed the rules last year.

On green finance, Jeanne Martin, ShareAction’s head of banking programme, said: “The 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.

“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.”

The coalition of investors, worth nearly a trillion dollars of assets under management, includes the Ethos Foundation, Epworth Investment Management, Royal London Asset Management, Axiom Alternative Investments, La Francaise Asset Management, Jesuits in Britain and Folksam pension fund, ShareAction said.

It comes after an analysis by ShareAction in November suggested a “structural lack of transparency” over the green finance activities of Europe’s 20 largest banks, leaving them open to allegations of greenwashing.

The investigation also found poor reporting on whether the green financing was for new assets or already existing projects with HSBC reporting that 77% of its 2022 green bond allocation was to already existing projects.

An HSBC spokesperson said: “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.

“We will be answering all their questions at our AGM and note in 2020, we outlined an ambition to deliver 750 billion to 1 trillion dollars of sustainable finance and investments by 2030, and since then have reported our progress in our annual report with a detailed breakdown across green, sustainable (which combine green and social) and social products.”