Election of Brendan Nelson as chair…………… AGAINST
Re-election of James Forese as director…………… AGAINST
HSBC has significantly weakened its controls on oil & gas companies, changed the standards it uses to engage with non-EU and -OECD thermal coal clients in ways that make them less clear, and diluted the ambition of its decarbonisation targets. It has also expanded its discretion in relation to its risk management policies across oil, gas, and thermal coal. Taken together, these reversals undermine the bank’s climate strategy and its management of environmental and transition risk. They signal a governance failure at board level, where directors have a responsibility to diligently exercise oversight of climate risks in order to safeguard long-term shareholder value. We consider the chair primarily accountable for the execution of the board’s responsibilities, and therefore recommend a vote against their election at the bank’s forthcoming AGM to restore confidence in the board’s oversight of climate risk and HSBC’s transition strategy. In addition, we recommend a vote against re-electing the chair of the Group Risk Committee, given this committee’s specific oversight of ESG risk.