HSBC has ruled out funding new coal-fired power stations all around the world with the exception of three countries - Bangladesh, Indonesia and Vietnam where funding may continue until 2023.
Europe's biggest bank announces intention to halt financing for coal-fired power plants as part of low-carbon drive - but lists Bangladesh, Indonesia and Vietnam as exceptions, according to a report published on www.businessgreen.com and https://ibsintelligence.com
HSBC, the biggest bank in Europe, has Friday announced it will stop financing coal-fired power stations, oil sands and Arctic offshore drilling projects in a move to support the low-carbon economy.
Announced ahead of the bank's annual meeting, the decision is likely an attempt to ease pressure from activist investors keen to see HSBC reduce its support for high carbon industries.
In a statement HSBC said the move will apply globally except for three countries - Vietnam, Indonesia and Bangladesh - which it said may be given a five-year "specific dispensation" if experts conclude there is no viable alternative energy source available.
HSBC said this was in order to "appropriately balance local humanitarian needs with the need to transition to a low-carbon economy".
Daniel Klier, group head of strategy and global head of sustainable finance, said the new policy reflects HSBC's ambition to help its customers transition smoothly to a low-carbon economy.
"We recognise the need to reduce emissions rapidly to achieve the target set in the 2015 Paris Agreement to limit global temperature rises to well below two degrees Celsius and our responsibility to support the communities in which we operate," he said.
HSBC had already restricted financing for coal power projects in 78 developed countries. The move expands this stance to almost every country around the world, and sees HSBC promise to exit all existing coal power financing in developed markets by the end of 2019.
HSBC said it will also stop financing new Arctic drilling projects for oil and gas, and greenfield oil sands projects.
Other large banks, such as ING and BNP Paribas, have made similar pledges in recent months.
Campaigners welcomed the news, but expressed concern over the three countries eligible for exemption. "HSBC's climate commitments here should not go uncelebrated, given how much they financed coal power last year," Katie Kedward, project officer at ShareAction, said in a statement.
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