Shareholders have overwhelmingly passed a plan that will phase out HSBC’s lending to any coal projects around the world by 2040, and sooner in Europe.
Preliminary data shows that 99.7% of investors voted in favour of the new climate pledge, making it the most popular out of all the proposals that were put to shareholders at a meeting on Friday.
The vote also means that the banking giant will have to set, disclose and implement a strategy to align its provision of finance with the 2015 Paris Agreement on climate change.
It was a proposition put forward by HSBC’s board after pressure from shareholders, including ShareAction, a group with more than 2.4 trillion US dollars (£1.7 trillion) invested in global assets.
Jeanne Martin, senior campaign manager at ShareAction, said: “We’re delighted that our campaign has resulted in a binding commitment by HSBC to phase out coal, but the devil is in the detail and the next six months are crucial to ensure that this commitment is translated into robust sector policies.”
According to a recent report, HSBC helped funnel more than 15 billion US dollars (£11 billion) to the coal industry between 2018 and 2020 through lending and underwriting.
At the shareholder meeting, HSBC was forced to repeatedly field questions from investors about fossil fuel projects around the world in which the company is involved.
The bank was asked about schemes in Africa and Indonesia, among others, as well as about support for oil giant Saudi Aramco.
However, chairman Mark Tucker repeatedly said the bank would not talk about specific projects or clients.
“In green financing of all sorts, HSBC is the world leader, and we take these responsibilities very seriously and we will continue to move forward on that,” he said.
But Adam McGibbon, from pressure group Market Forces, expressed scepticism.
“HSBC’s management, having spent the AGM dodging climate questions from shareholders, have said or done nothing during today that will steer the bank away from being one of the world’s biggest funders of the fossil fuel industry,” he said.