HSBC sets deadline for Asian customers to quit coal

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HSBC will cease providing services to corporate clients involved in coal as it seeks to phase out all funding for the coal industry by 2040 globally and by 2030 in the EU and OECD, the bank said in a new policy.

“Eliminating emissions from coal-fired power plants is the most symbolic and important step on the road to zero emissions,” said the bank’s chief sustainability officer, Celine Herweijer.

“Coal-fired power plants contribute about a fifth of the world’s carbon emissions, and science tells us very clearly that they cannot be part of a net zero world. No new coal is no longer good enough: our attention must turn to the urgent elimination of existing coal-fired electricity.”

Regardless of the urgency of phasing out current coal-fired generation capacity, HSBC noted that a premature exit from coal would not be an option, aware that “an abrupt exit from coal would literally turn off the lights for These persons. . This would jeopardize their most basic development needs, while disrupting the industry and producing a huge social impact of job losses in the coal regions.

Either way, the bank has big ambitions in the area of ​​coal-related emissions. The policy plans to cut its funding to the thermal coal industry by a quarter by 2025 and by half by 2030, Herweijer said.

As part of this effort, the bank will ask its corporate clients to submit transition plans and verify their clarity, credibility and pace of progress. If a customer fails the test or refuses to provide this information, HSBC will suspend services which may include financing and advice.

HSBC is one of the biggest lenders in Asia, which in turn is the biggest consumer of coal in the world. However, according to Herweijer, this is more of an opportunity than a risk.

“The greatest contribution we can make … is arguably being at the heart of Asia’s energy transition,” she said.

By Irina Slav for Oilprice.com

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