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HSBC (HSBA.L), Europe’s leading banker to corporate Asia, laid out its long-awaited policy on financing thermal coal on Tuesday, and said it expected all its clients to have a plan in place to exit the fossil fuel by the end of 2023.

Coal is contentious for governments across Asia as they look to move away from the cheap and widely used, but carbon-intensive energy source to help meet a global commitment to cut emissions in the fight against climate change.

Under its plan, HSBC will cut exposure to thermal coal financing by at least 25% by 2025 and 50% by 2030, although non-EU or non-OECD-based clients could be funded until a global phase-out by 2040, its sustainability chief told Reuters.

However, groups which had campaigned for HSBC to issue an explicit policy on thermal coal said the bank’s plan did not go far enough and still lacked sufficient “urgency”.

Building on an existing pledge not to finance new coal-fired power plants or thermal coal mines, HSBC said its policy would help phase out existing coal use in line with the science of climate change and be reviewed annually.

[Lawrence White and Simon Jessop]

More: HSBC says clients must have plan to exit coal by end-2023

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