June 17, 2025 - HSBC appears to have breached its own climate pledge yet again by helping to raise billions for companies expanding their coal operations.

The Bureau of Investigative Journalism (TBIJ) can reveal that the bank helped raise $2.4bn last year in deals that seem to violate its phase-out policy for coal, the world’s dirtiest fossil fuel. HSBC came under fire from investors last month for doing the same in 2023.

HSBC helped raise more than $14bn last year for coal companies more broadly, according to a report out today. Banking on Climate Chaos, published by climate campaign group Rainforest Action Network, now ranks HSBC as the UK’s second largest funder of fossil fuel companies.

TBIJ previously revealed that HSBC appeared to have broken its pledge in 2023 by helping raise $1bn for the mining giant Glencore, which was increasing coal production. It prompted one of the bank’s investors to challenge HSBC chairman Mark Tucker at its annual meeting last month.

At the meeting, Tucker repeated HSBC’s pledge made in 2021: “If a client has made, or makes, a new commitment to thermal coal expansion, or proceeds with thermal coal expansion, we would seek to withdraw any financing or advisory services as soon as possible.”

In June 2024, however, HSBC helped arrange a $900m loan for India’s JSW Steel, which is building a new 900MW coal and gas-fired power plant in the Indian state of Odisha. This is set to power a vast new steel complex being built on 2,700 acres of forested land.

Villagers say building the complex could destroy the livelihood of 40,000 people in local communities, as well as having devastating environmental impacts, according to a coalition of human rights groups. It said communities resisting the proposed construction of the plant have suffered brutal repression at the hands of the police.

The loan appears to be a clear breach of HSBC’s coal phase-out policy, which includes so-called captive plants that companies operate to meet their own energy needs. HSBC states: “For the avoidance of doubt, the policy does apply to clients engaged in new captive thermal coal-fired power plants.”

The policy does allow funding for companies with coal-fired power plants already under construction in January 2021 but that is not the case for JSW, which only received final approval for the plant last year.

A spokesperson for the Jesuits in Britain, an HSBC investor, told TBIJ: “The actions they appear to be taking risk diminishing the trust and good faith we have in them as investors.” They added: “True leadership demands transparency and consistency, ensuring that commitments to care for our common home are met with concrete steps in practice.”

Andrew Harper, deputy chief executive of Epworth Investment Management, which is both a customer of HSBC and investor in its shares and bonds, said the bank’s loan is “a direct contradiction of their stated commitment to withdraw funding from companies expanding coal”.

He added: “It raises a deeper concern. Is HSBC’s policy enforceable, or is it simply a marketing tool designed to withstand shareholder pressure?”

HSBC said: “We follow a clear set of sustainability risk policies which support our ambition to align the financed emissions in our portfolio to net zero by 2050. We do not comment on client relationships.”

JSW Steel said the loan was not raised specifically for the steel complex. It said the project has been approved by the Indian government and is expected to generate about 72,000 jobs. It said it has paid compensation beyond what is required to those who have been displaced and that Indian courts have dismissed challenges and upheld the environmental clearance for the project.

A spokesperson for JSW said: “We are guided by our stated sustainability policies dealing with the environmental management, business ethics and human rights.”

Coal is the single biggest cause of global temperature rise and a major source of deadly air, land and water pollution. Two years ago at the Cop climate talks, all countries agreed it was essential to accelerate the transition away from coal power in order to avert catastrophic climate change.

HSBC says there needs to be a rapid decline in coal emissions in order to keep global heating under 1.5°C. In January 2024, the bank reiterated its commitment to stop funding companies that were building new coal-fired power stations and increasing production of coal.

But TBIJ found a number of deals that appear to breach those conditions. They include an $815m bond issuance for CEZ, the Czech Republic’s majority state-owned utility group; a $400m bond issuance for Korea Mine Rehabilitation & Mineral Resources Corporation, another state-owned entity; and a $300m bond issuance for a subsidiary of Power Construction Corporation of China.

All three companies are expanding their coal operations, according to the Global Coal Exit List (GCEL), a database for investors compiled by climate campaign group Urgewald.