HSBC Accused of Hypocrisy for Coal Finance Ban That Excludes Countries Most Vulnerable to Climate Change

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HSBC has been accused of โ€œgreenwashingโ€ after announcing a new energy policy that fails to rule out financing new coal power plants in three developingย countries.

The bank agreed a new policy at its AGM in April, which prohibited providing new financial services to coal power plants, except in Bangladesh, Vietnam, andย Indonesia.

Campaigners from Christian Aid have released a new report that criticises the decision to exclude those three countries. HSBC says it takes its responsibility to helping countries meet the Paris Agreement climate goals, seriously. However, campaigners say the new energy policy shows the bank is not serious about fulfilling its aim to be a sustainable leader in theย sector.

HSBCโ€™s new energy policy states the company will โ€œstop financing new coal-fired power in all countries around the world apart from Bangladesh, Indonesia and Vietnamโ€ as part of its efforts โ€œto support a transition to a low-carbonย economyโ€.

The policy says โ€œa targeted and time-limited exception will apply to these three countries in order to appropriately balance local humanitarian needs with the need to transition to a low-carbonย economyโ€.

A 2018 research paper by HSBC suggests all three countries are within the 20 most vulnerable to climate change. It ranks Bangladesh as the fourth most vulnerable country, with Vietnam ranked 14th, and Indonesia in 17thย place.


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Christian Aidโ€™s report says HSBC financed $3 billion of coal projects between 2014 and 2017. That investment included loans of $122 million in Vietnam and $149 million in Indonesia, and $1 billion in underwriting inย Indonesia.

HSBC has also pledged to provide $100 billion in sustainable financing and investment byย 2025.

HSBCโ€™s decision to exclude the three south east Asian countries from its latest energy policy comes in contrast to the direction some of its competitors are taking on the issue. Last month, Standard Chartered announced a global ban on coal financing.

In May, Royal Bank of Scotland (RBS) announced that it will stop funding coal and tar sandsย projects.

Christian Aidโ€™s report criticises the โ€œmythโ€ that coal power is essential to economic development. It points to reports from NGOs including Global Witness, Share Action and Greenpeace that suggest dependence on coal power production can actually entrench poverty.

Nguy Thi Khanh, founder of the Green Innovation and Development Centre in Vietnam, said the bankโ€™s policy showed HSBC had โ€œlazily racist double standardsโ€. She said in aย statement:

โ€œRemarkably HSBCโ€™s commitment excluded my own country, along with Indonesia and Bangladesh. My daughter, along with the rest of Vietnam, it seems, doesnโ€™t have the right to breathe clean air like the rest of theย world.โ€

She said HSBCโ€™s policy was โ€œan attempt to hide its greed behind a thin veneer of condescending concern for the provision of โ€˜cheapโ€™ power inย Vietnam.โ€


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Helen Collinson, campaign lead at Christian Aid, said HSBCโ€™s policy did not legitimately make the case for excluding the three countries. She said in aย statement:

โ€œIf not investing in coal is good enough for the rest of the world, why isnโ€™t it good enough for Vietnam, Bangladesh andย Indonesia?

โ€œA number of charities and policy institutes have provided evidence to HSBC demonstrating that coal is not needed to tackle energy poverty and yet they refuse to close thisย loophole.

โ€œIf HSBC really cared about โ€˜making their money greenโ€™ they could start by ruling out new coal financing in every country, like Standard Chartered have doneโ€, sheย said.

HSBC has been contacted forย comment.

Last week, the UNโ€™s climate science advisors released a major new report outlining the necessary steps to prevent the world warming by more than 1.5 degrees โ€” including completely phasing out coal power production byย 2050.

In 2016, research from Oxford University showed no new coal plants could be built after 2017 if the world was going to hit the Paris Agreement target of preventing warming of more than twoย ย degrees.

Image:ย Hรฅkan Dahlstrรถm/Flickrย CC BYย 2.0

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Mat was DeSmog's Special Projects and Investigations Editor, and Operations Director of DeSmog UK Ltd. He was DeSmog UKโ€™s Editor from October 2017 to March 2021, having previously been an editor at Nature Climate Change and analyst at Carbon Brief.

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