Clients must have plan to exit coal - HSBC

HSBC expects all of its clients to have a plan to exit coal by the end of 2023.

The announcement was made Tuesday (December 14), and comes after investors and activists put pressure on the lender.

As Europe's leading banker to corporate Asia, HSBC is heavily exposed to the coal industry.

Emerging markets rely on the cheap and widely used fossil fuel, but countries have a commitment to cut emissions to fight climate change.

With its new plan, HSBC said it will cut exposure to thermal coal financing in half by 2030.

Though non-OECD and non-EU based clients could be funded until a global phase-out by 2040.

In a win for campaigners, HSBC said the new policy would apply to all parts of its business, including asset management.

The lender said next year it would also announce a science-based target for coal-fired power.

It would also withdraw services from any client that tries to expand thermal coal production.

Rivals like Natwest have set tougher targets, but HSBC is more exposed to energy clients with a heavy reliance on coal.

The bank said it would work with those partners on moving towards greener energy.