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HSBC shareholders seek exit from funding Adani's 'contentious' Australian coalmine

By Our Representative 

In a move that may embarrass India's top business house known to be close to Prime Minister Narendra Modi, shareholders of HSBC, a British multinational investment bank, the largest in Europe with total assets of US$2.715 trillion, are likely to decide at its AGM on May 28, 2021 a plan to exit coal financing related to the Adani Group, as it begins digging the Carmichael mega coal mine in Australia, reports Melbourne-based South Asia Times.
The report quotes StopAdani campaigners calling upon HSBC to commit to no further financing for the Adani Group, and for the bank to speak out against the proposed AUD$1 billion State Bank of India loan for the “destructive” Carmichael coal mine in Australia.
As of today, HSBC is a major bondholder in Adani Ports which owns the company that will operate the coal haulage from Adani’s Carmichael mine to its port on the Great Barrier Reef. It is also a key financial partner for the State Bank of India, which is considering an AUD$1 billion loan to Adani for the Carmichael coal mine in Queensland.
Julien Vincent, a campaigner at Market Forces, said: “HSBC’s shift out of coal must include divestment from The Adani Group. Adani’s planned Carmichael project will open a massive new thermal coal basin in the midst of a climate crisis.”
Protests were held recently by the StopAdani movement at HSBC branches across the world. Thousands of emails were also sent out to HSBC executives and environmental finance experts criticising HSBC’s connections to Adani.
The report quotes from a statement by HSBC investors, which seeks prohibition of general corporate financing and underwriting to companies that are highly dependent on coal mining and/or coal power, as well as companies planning new coal mines, coal plants, and coal infrastructure.
The statement also insists a commitment to help clients develop, publish and implement coal phase-out plans in line with the 2030/2040 timelines by a specific date and no later than December 2023; and a commitment to focus on the entire coal supply chain, including coal equipment manufacturers and any other coal supply chain function that contributes to the expansion of coal-related activities.
Meanwhile, BankTrack, a global tracking, campaigning and NGO support organisation targeting the operations and investments of international commercial banks, has said that USD 2.4 trillion investor coalition led by ShareAction has secured “landmark climate commitments from HSBC”, with HSBC’s board tabling a resolution that commits the company to phase out financing of coal-fired power and thermal coal mining by 2030 in the EU and OECD-countries and by 2040 elsewhere.
HSBC is a key financial partner of State Bank of India, which is considering an AUD$1 billion loan to Adani
BankTrack qouted Jeanne Martin, senior campaign manager at ShareAction, as stating, the announcement shows that “robust shareholder engagement can deliver concrete results and sets an important precedent for the banking industry. Net zero ambitions have to be backed up with time-bound fossil fuel phase-outs and today HSBC has taken an important step in that direction.”
The HSBC board-backed proposal is a ‘special resolution’, which would become binding on the bank if approved by 75% of shareholders at the AGM. If passed, it would commit the bank to set, disclose and implement a strategy with short- and medium-term targets to align its provision of finance across all sectors, starting with oil and gas and power and utilities, with the goals and timelines of the Paris Agreement.
BankTrack said, HSBC acknowledged that the expansion of “coal-fired power is incompatible with the goals of the Paris Agreement”. This, it said, was “a significant statement for the bank, which had channelled more than USD 15 billion to coal developers between October 2018 and October 2020.” Ironically, as recently as January HSBC had argued that “divestment was not the best option for the environment or for the people and the communities that rely on these traditional industries.”
BankTrack said, the investors have asked that HSBC’s coal policy, to be published by the end of 2021, to include:
  • A prohibition of general corporate financing and underwriting to companies that are highly dependent on coal mining and/or coal power, as well as companies planning new coal mines, coal plants and coal infrastructure;
  • A prohibition of general corporate financing and underwriting to companies that are highly dependent on coal mining and/or coal power, as well as companies planning new coal mines, coal plants and coal infrastructure;
  • A commitment to help clients develop, publish and implement coal phase-out plans in line with the 2030/2040 timelines by a specific date and no later than December 2023; and
  • A commitment to focus on the entire coal supply chain, including coal equipment manufacturers and any other coal supply chain function that contributes to the expansion of coal-related activities.

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