Letter to Stuart Gulliver, CEO of HSBC
March 15, 2016
Below is the full text of our letter to HSBC CEO Stuart Gulliver (also being delivered to John Laidlow, BankTrack‘s contact at HSBC, and Simon Martin, Head of Group Corporate Sustainability), which you can send using our tool on the Quit Coal campaign page. All of the claims made are based on publicly available research, but if you are interested in the evidence, contact Dan on firstname.lastname@example.org.
Dear Mr Gulliver,
I was shocked to hear about the €8 billion HSBC has provided in financing for coal mining since 2007. The Mining and Metals Sector policy released that year, despite being apparently ‘consistent with HSBC’s long-standing commitment to sustainable development,’ makes no mention of climate change or the imperative to end coal extraction. The policy was outdated the moment it was published, so I am glad to hear that it is being rewritten.
The reasons for quitting coal are manifold. The industry is in terminal decline; US coal companies are plagued by bankruptcy, China is closing mines by the thousands, Indian imports are stalling, and thermal coal has hit its lowest price in a decade, threatening the viability of mining projects worldwide. Beyond these concerns lies the ever increasing possibility of assets becoming stranded. Indeed, your own 2015 report recognised that ‘coal assets face the greatest regulatory risk’. Responsible lenders and investors are reacting to these indicators en masse, so much so that by the end of last year the sum of divestment from fossil fuels stood at a staggering $3.4 trillion. By instead continuing to prop up the ailing coal industry, HSBC not only risks its financial integrity, but is demonstrably behind the times.
This is not to mention the human and ecological imperatives. Drummond’s operations in Colombia have displaced indigenous communities from their land and the company has been implicated in grave human rights abuses. Meanwhile, mountaintop removal in the US has defiled the natural landscape and poisoned the local water supply. These are just two cases in which HSBC is complicit, but illustrate well the reputational risks associated with financing this destructive industry.
More generally, coal is the single greatest contributor to anthropogenic carbon emissions, and hence to climate change. A 2C carbon budget demands that we burn only 20% of existing coal reserves, but the 1.5C target cited in the recent Paris Accord calls us all to even more immediate action. For many people around the world, this is not an arbitrary number but the only hope of maintaining a liveable world. The only reasonable response, both financially and ethically, is to keep coal in the ground. That means moving on mining.
In recognition of the gravity of these concerns, your new Mining and Metals Sector policy must exclude financing for coal mining completely. To this effect, I would suggest the inclusion of the following:
– A commitment to immediately cease financing for new coal mining projects
– A commitment to phase out banking activities and services, including lending, share and bond underwriting, asset management, and advisory services, for any company planning to expand its coal mining operations, for which 30% of activities or revenues relate to coal mining, or which produces more than 20 million metrics tons of coal per annum
– A plan detailing how and by which time this phase out will be fulfilled (and in the interests of accountability, I would expect regular and public reporting on progress towards its implementation).
I note that HSBC’s AGM is on April 22nd. I think this would be the perfect opportunity to define HSBC’s position on climate change by announcing, for the benefit of shareholders and the wider public, your intention to end support for coal mining. If you continue to ignore the imperative to quit coal, the fallout is likely to be serious.