Written by 1:49 pm EU Investment

HSBC AM to phase out thermal coal investing

The firm’s transition away from thermal coal will see the exclusion of such companies by 2030 in the EU and the Organisation for Economic Co-operation and Development (OECD) markets, and globally by 2040.

HSBC AM said it will stop supporting companies who do not show credible plans to transition away from thermal coal within the timeframe, including voting against company chairs at annual general meeting or, ultimately, divesting.

The firm said that by the end of 2030, it will not hold listed securities of issuers with more than 2.5% revenue exposure to thermal coal in EU/OECD markets and globally by 2040 across its actively managed portfolios.

Also, there will be no new exchange traded funds or index funds with more than 2.5% exposure to thermal coal issuers.

HSBC AM chief executive Nicolas Moreau said the move is a “determined step” to phase out thermal coal.

“Global emissions will only be reduced if there is concerted collaboration to meet the goals of the Paris Agreement and we are committed to playing our part.

“We have already stopped direct investments in new or existing thermal coal projects. We are working on two fronts: coal phase out will go hand-in-hand with pioneering new investment solutions in our Alternatives business to scale sustainable infrastructure investment and venture capital for critical climate technology solutions.

“We believe in working in partnership with our clients to transition away from thermal coal, while supporting a just transition. But we are clear that we will need to walk away from companies who don’t or won’t take active credible steps to reduce emissions.”

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