HSBC’s 2040 coal phaseout still too late for Asia

The Center for Energy, Ecology, and Development welcomes the creation by UK-based multinational bank HSBC of its own resolution to wind down its financial support to coal, but casts doubt as to the sufficiency of its 2040 coal phaseout target in adhering to imperatives of the climate crisis.

The board-backed resolution was tabled in response to increasing pressure from some of its institutional and private investors and customers, who in January filed a resolution with the bank urging it to publicize a strategy and clear targets in restricting its financial exposure to coal. This initiative was supported by CEED and more than 20 civil society formations in climate-vulnerable South and Southeast Asia through an open letter to HSBC published in the UK Financial Times last week.

While the commitment to end its coal financing by 2030 in the European Union and OECD and 2040 elsewhere is a step-up from the bank’s earlier vague target of a net-zero investments portfolio by 2050, it falls extremely short in meeting the 1.5°C ambition of the Paris Agreement, which demands the radical reduction of greenhouse gas emissions globally by 2030. With its resolution, HSBC commits to continue fueling the expansion of coal in Asia by at least two more decades, despite the region already being crowned as the last bastion of the coal industry today. By doing so, HSBC risks the future of millions in climate-vulnerable Filipino and Asian communities with the certainty of even more catastrophic climate change. We thus urge HSBC to use the months leading up to its Annual Governors Meeting on May 28 to rethink its current commitment and come up with a resolution fully aligned to Paris goals –  – that is, an end to coal financing way before 2030 – allowing its shareholders to vote for a move that catalyzes the end of coal in Asia once and for all.

Nonetheless, we believe that the outcome of a bank-led resolution is an acknowledgement of the power held by stakeholders and civil society in moving financial institutions to put out the flames of coal. It also confutes excuses by other large investors of the coal industry in their inability to come up with ambitious public coal phaseout plans and timelines. We turn particularly to Standard Chartered, the Bank of the Philippine Islands, Banco De Oro, and other local and international institutions providing the biggest backing to coal companies in the Philippines today to listen to their stakeholders and turn coal into a dying industry, contributing fully instead to the country’s transition to clean and affordably renewable energy systems.