HSBC and Barclays Challenged Over Alleged Coal-Linked Bond
HSBC and Barclays are under the spotlight over claims by an Australia-based climate activist that it had participated in the indirect financing of coal-fired power in Vietnam.
The Environmental Defenders Office (EDO) said that the 250 million British pound ($345 million) bond issuance by the Japan Bank for International Cooperation (JBIC) would support the expansion of the Vung Ang 2 power project, according to a letter seen by «Reuters».
EDO, which has a track record of pushing complaints into formal court challenges, is acting on behalf of Anthropocene Fixed Income Institute (AFII), a climate-focused think tank.
Indirect Funding
While the funds raised by the JBIC through the issuance was not specifically used to finance Vung Ang 2, EDO said previous JIBC statements made clear that the money would go into a pot from which funding for the Vietnamese project would be drawn.
EDO added that the bond prospectus did not explicitly state that the funds could be used to fund Vung Ang and that it failed to highlight potential risks that counter global efforts to transition to a low carbon economy.
Next Steps
According to AFII founder Ulf Erlandsson, initial responses have been issued by both banks denying any breach of their coal policy and he will now go back to clarify certain issues before deciding on the next steps.
Banks will increasingly face pressure for their overall activities as most market their ambitions to win a share of the sustainable finance market. HSBC group chief executive Noel Quinn, for example, said the British lender aimed to provide $750 billion to $1 trillion in sustainable financing and investments over the next ten years.
