HSBC – take responsibility for your role in driving climate change
June 2, 2015
Dear Brendan McNamara,
Thanks for responding on behalf of HSBC to our supporters regarding our current campaign on fossil fuel divestment. We welcome HSBC’s willingness to engage on the urgent issue of climate change, and note that HSBC has now become the fourth major bank to publicly respond to our campaign.
We applaud HSBC for the genuine progress made – providing 1 million people with sanitary water is particularly impressive. That said, there are still significant improvements that can be made on your own measures. By its own admission, 91% of HSBC’s energy needs are provided by fossil fuels, whilst the bank could certainly do better than just an 8% reduction in energy consumption since 2013.
The environmental performance of the bank itself as a company is, however, a side note when compared with the broader impact of the bank’s lending and financial services decisions. Providing finance to fossil fuel extraction companies, for example, allows and enables them to extract fossil fuels that have a far bigger impact than just the internal activities of HSBC itself.
HSBC invested over £17 billion in fossil fuel extraction companies in 2012 alone. By contrast, there is a lack of transparency over the comparative size of your renewable and sustainable investments, or “Climate Business” as you call it. The bank also neglected to respond to requests from Move Your Money about its environmental policies and holdings, and we note that you have also ignored the calls from our supporters – your customers – to disclose, in full, the bank’s investments in fossil fuels.
It is laudable that HSBC recognises the economic opportunities that the transition to a sustainable economy presents. But without disclosing the size and value of your “increasing share of low-carbon energy production [investments]” it is impossible to make an informed judgment on the net environmental impact of HSBC’s funding decisions.
As a result of these facts, it seems highly unlikely that your investments promoting sustainability outweigh the impact of your carbon-intensive investments.
We also harbour other concerns about your response to the campaign. In the sustainability documents you highlighted, HSBC talks frequently about balancing the risks presented by climate change with opportunities for making profit.
The problem is, climate change isn’t just a financial risk or a matter for corporate social responsibility, but instead represents an existential threat to the future of humanity.
That may sound extreme, but so are the adverse social and environmental impacts that the climate crisis is already producing – from climate migrants to rising sea levels and acidification, via the destruction of the animal kingdom and the natural world.
With HSBC’s track record of extensive fossil fuel investments, lack of investment transparency, and fiduciary duty to shareholders to maximise short-term profits, we fear that your analysis of what constitutes the “right” balance will not be robust enough to avert climate chaos.
This is even more the case given HSBC’s commitments to “anticipate”, “respond” and “prepare for shifts in environmental and social priorities.” HSBC should be setting the agenda and actively working to avert the climate crisis in the first place, rather than passively responding to climate change and renouncing responsibility for the impact of your investments. Our analysis found that HSBC was the biggest investor in fossil fuel extraction of the big 5 – it’s time to take responsibility for that.
Finally, we also share grave concerns about your support of unconventional fossil fuel extraction.
HSBC claims to recognise that “the generation and supply of energy can have negative impacts on people and on the environment when not managed responsibly. These impacts tend to increase where accessible energy resources have already been exploited and companies seek unconventional resources in sensitive or undeveloped locations.”
Yet despite this, HSBC has expressed clear and continued support for unconventional extraction time and time again – whether that’s banking Cuadrilla, lending to Dart Energy, or supporting BG Group raise over €1 billion for extractive activities. It’s simply not good enough to recognise the overwhelmingly adverse impacts of such practices on the one hand, and yet in the same document outline your criteria for funding such projects on the other.
Given these concerns, we reiterate the call from your customers and stakeholders in society more broadly to:
- Disclose all of HSBC’s investments in the fossil fuel industry within three months; and
- To commit to a 5-10 year plan to divest from fossil fuel investment within three months
In the absence of such commitments, we will have no choice but to continue to recognise HSBC as a key driver of climate change and fossil fuel extraction. This will remain the case until you have made a solid, lasting, and credible commitment to fossil fuel divestment, as outlined above.
There is significant moral, social and financial imperative for HSBC to mobilise its significant resources and influence towards genuine sustainability in energy and climate change. We hope that HSBC will act on these responsibilities judiciously, by committing to divest from all fossil fuel funding.
In hope and anticipation,
Move Your Money UK