(ATF) HSBC has fought off an investor revolt by conceding to demands it reduces its support of the coal industry.
The London-based bank said it would phase out its financing of the coal industry in the developed world by 2030 and in the developing world by 2040.
The motion was approved by investors that hold $2.4 trillion of assets who had last year threatened action if the bank didn’t do more to sever its links with fossil fuels. It’s among finance firms that also include Barclays bank, that have been prompted by investor pressure to clean up their environmental acts.
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The HSBC backers under the ShareAction activist investor umbrella withdrew a motion to reject the bank’s original proposal.
"Today’s announcement shows that robust shareholder engagement can deliver concrete results and sets an important precedent for the banking industry,” ShareAction senior campaign manager Jeanne Martin said, according to reports.
The new goals from HSBC also include short and medium-term targets on aligning its financing with the goals of the landmark Paris agreement on climate change.
HSBC's announcement reinforces how the world's biggest financial firms are bowing to mounting public and political pressure to join the battle against climate change, by reducing their funding of fossil fuel companies and encouraging clients in other sectors to cut emissions.
ShareAction said it would now look to hold the bank to account and ensure it followed through with its promises.
“Our focus now turns to ensuring it delivers on these commitments,” Martin said.
HSBC will report on its progress annually, it said on Thursday, starting this year.
“By covering all aspects of its financing, all regions in which it operates, and all sectors that it lends to, HSBC’s commitment offers a model for other banks to follow,” Natasha Landell-Mills, head of stewardship at UK asset manager Sarasin & Partners was quoted as telling the Financial Times.
- Additional reporting by Reuters