"No more loopholes: HSBC closes door on new coal projects," 27 April 2020

The Hongkong and Shanghai Banking Corporation (HSBC)...announced it would no longer finance new coal power stations anywhere globally, closing loopholes enshrined in its previous energy policy that allowed the London-headquartered lender to bankroll coal projects in certain developing nations.

Responding to shareholders’ questions online amid the ongoing coronavirus crisis, the finance group stated it had amended its policy aimed at phasing out coal support, removing the previous exemption of Bangladesh, Indonesia and Vietnam, which was slammed by activist groups in 2018 as experts warned no new fossil fuel power plant could be built if climate change was to be kept at bay.

HSBC said while its now obsolete energy guidelines had permitted loans to coal projects in these emerging markets to “balance local humanitarian needs with the need to transition to a low carbon economy”, it had not financed any new coal projects anywhere since.

The new policy means the bank will cease its involvement in funding Long Phu 1, a planned coal project in Vietnam for which it was acting as global coordinator, and follows a decision earlier this year to withdraw from Vinh Tan 3, another major coal power station in Vietnam.

The move comes as an increasing number of financial institutions cut ties with coal, the world’s dirtiest fossil fuel. Last December, Standard Chartered Bank, one of HSBC’s major rivals with a significant presence in Asia, said it would pull out of three coal projects in Southeast Asia, while three major Japanese lenders exited coal in April alone.

In its latest statement, HSBC conceded that a proportion of its global asset management funds included coal companies, confirming the findings of a recent study by campaign group Market Forces that HSBC continues to back the coal industry through the ownership stakes it holds in firms building new coal capacity.

HSBC stated: “Most large companies have legacy operations that cannot simply be ‘turned off’ immediately, as well as new or planned developments and activities. Our approach creates the opportunity to support customers in their transition by directing finance to the right areas, while supporting the overall business.”

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Note from Business & Human Rights Resource Centre: In April 2020, we asked HSBC and 18 other banks to respond to the report, Banking on Climate Change 2020. We published their responses on our website.