HSBC is the latest global financial organisation to bow to shareholder pressure and implement climate change initiatives across its operation. Rather than face a resolution from shareholders at its May AGM, the bank’s board has agreed to propose a new special resolution which will commit HSBC to phasing out financing for coal-fired power and thermal coal mining across the EU and OECD by 2030, and across the world by 2040.
This goes further than its original pledge to simply limit the financial services it provides to fossil fuel producers in a bid to manage the impact of climate change. HSBC has also said it will not use climate change models that include technologies that claim to ‘remove carbon’ from the atmosphere which are still unproven.
PIRC welcomes yet another step forward for shareholder engagement on climate change. It is clear evidence that financial institutions can no longer avoid this issue. Responsible investment campaign group Share Action co-ordinated the resolution which follows a similar initiative last year at Barclays where the bank put up its own resolution in response to the shareholder proposal. Both boards and investors are becoming more canny in their approaches, and the detail of commitments given by boards is becoming increasingly important.
Elsewhere National Grid has agreed to put a climate change action plan to shareholders. The company said it will seek a non-binding advisory vote on its commitment to becoming a net zero business in its Scope 1 and 2 greenhouse gas emissions by 2050 or sooner; its Scope 3 reduction target consistent with the Task Force on Climate-related Financial Disclosures; and to transition the business to align with the goals of the Paris Agreement. The National Grid AGM takes place on 22 July.
The announcement follows the Say on Climate campaign founded by billionaire Chris Hohn and supported by PIRC and major institutional investors which demands companies submit at an action plan on mitigating climate change risk for shareholder approval. Boards are starting to recognise that shareholders take climate change seriously and they expect the companies in which they invest to have transparent and realisable plans for mitigating the risk.

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