Home > HSBC bows to pressure and will phase out coal lending. It must also cut ties with Adani

HSBC bows to pressure and will phase out coal lending. It must also cut ties with Adani

16 March 2021

In response to a shareholder resolution coordinated by ShareAction, HSBC, Europe’s largest bank and one of the biggest backers of fossil fuels, has announced it will table its own resolution on plans to phase out financing for coal-fired power and thermal coal mining across the EU and OECD by 2030, and across the world by 2040. This is a welcome move and testament to increasing investor and community pressure pushing the world’s biggest banks out of fossil fuel finance.

HSBC will formulate the details of its policy this year. It needs to ensure that this policy results in immediate exclusion of corporate financing of, and investment in, companies like those in the Adani Group which are pursuing major thermal coal expansions.

For example, despite ruling out direct support for the Australia-based Adani Carmichael coal project in 2015, HSBC is a shareholder and bondholder in Adani Ports, which owns the company setting up coal haulage for the Carmichael project. HSBC’s role in managing bonds for the State Bank of India (SBI) could also link it to Adani’s disastrous Carmichael project. The State Bank of India is the only bank in the world which is still open to lending to Adani for the controversial coal project and is reportedly considering a AU$1 billion loan to fund the coal project. HSBC has said nothing on SBI’s potential funding of Adani Carmichael, even while investors dump SBI’s green bonds in protest.

HSBC’s coal policy will have a loophole the size of Australia unless it commits to no further financing for, or investment in, Adani Group companies. HSBC’s new policy must also commit the bank to cutting ties with the SBI if it lends to Adani.

The bank’s announcement means it has acknowledged that expansion of coal is incompatible with the goals of the Paris Agreement. HSBC needs to make sure its coal exit policy will mean divestment from the Adani Group, and a willingness to end its partnership with the State Bank of India.

Financial analysts have said that HSBC’s silence over the SBI’s potential funding of the Carmichael project undermines the bank’s green bond work. If HSBC’s resolution does not include a plan to end its relationship with Adani Ports and SBI, the bank will face the reputational damage that comes with supporting a project opening up one of the world’s largest untapped thermal coal basins amidst the climate crisis.

Take action: Tell HSBC its exit from coal must include cutting ties with the companies supporting Adani coal.

Take action

Tell the banks and investors they must cut ties with Adani Ports.

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Your message to HSBC (your name will be added to the bottom)
Dear HSBC, I am writing to acknowledge your important step, putting forward a resolution that could commit the bank to align its coal exposure with the Paris Agreement’s climate goals. I am, however, concerned that your phase out of lending to coal may not include your relationships with companies helping to build Adani’s controversial and climate-destroying Carmichael coal project. Can you confirm to me personally, and announce publicly, that your resolution will mean that you cut ties with the Adani Group and, if necessary, the State Bank of India (SBI)? As a shareholder and bondholder in Adani Ports, you are aware that Adani Ports owns the company deploying the coal haulage operation for the Carmichael mine. Your investment in Adani Ports exposes you to the reputational risks that come with opening up a greenfield thermal coal mine, near the Great Barrier Reef, amidst the climate crisis. As you will also be aware, your client SBI is considering lending AU$1 billion to Adani’s Carmichael mine. While investors like BlackRock, Amundi, AXA and Storebrand spoke out against the proposed loan, HSBC has remained silent. Your resolution to exit thermal coal financing must include ending your relationship with SBI if it lends to the Carmichael coal project. Maintaining relationships with Adani Ports and the State Bank of India (if it opts to fund Carmichael) would mean HSBC would continue to be exposed to thermal coal via Adani’s mega-mine which will open up one of the world’s largest untapped thermal coal basins. I am aware that you are one of the over 90 banks, insurers and engineering companies that have ruled out any direct support for Adani’s coal port, rail and mine project. However, your willingness to invest in Adani Ports connects your company to Adani’s widely shunned coal project, undermining global efforts to mitigate the impacts of climate change. Adani’s Carmichael coal project does not have the consent of the Traditional Owners, would drain billions of litres of precious water resources, increase coal ships in the Great Barrier Reef World Heritage Area and turbocharge global warming. The entire project is the subject of one of the biggest community resistance campaigns in Australia’s history. Any company associated with this project faces major risks to its reputation. I urge you to ensure that any update or addition to HSBC’s coal or energy policies rules out any further investment in Adani and commits the bank to cutting ties with SBI if SBI lends to Adani. I look forward to your response,
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