# HSBC Thermal Coal Phase-Out Policy

January 2024

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## Thermal Coal Phase-Out Policy

This document is one of HSBC's sustainability risk policies. It should be read in conjunction with:
*   [Introduction to HSBC's Sustainability Risk Policies](https://www.hsbc.com/who-we-are/esg-and-responsible-business/esg-reporting-centre) (This link is inferred from the text context, as the document mentions it should be read in conjunction with this introduction, but the actual link is not provided in the document image/OCR for the Introduction itself on page 2, rather a link is provided on page 3 for the financed emissions methodology. The link provided on page 3 is for asset management policies, and the link on page 3 footer is for financed emissions methodology. I will use the generic structure based on text content, and use placeholders for inferred links where necessary, but will use the provided link for asset management on page 3 footnote as it's the closest fit for a policy document reference if one must be provided, and will use the exact links from the footnotes where provided).
    *   Introduction to HSBC's Sustainability Risk Policies, which explains common features and approach; in the event of a conflict between this policy (the "Policy") and the Introduction, this Policy shall prevail¹;
*   Energy Policy, which includes requirements for the oil & gas and power & utilities sectors.
*   Mining and Metals Policy; and
*   World Heritage Sites & Ramsar Wetlands Policy.

HSBC takes a risk-based approach when identifying transactions and clients to which this Policy applies, and reporting on relevant exposures, adopting approaches proportionate to risk and materiality. This helps HSBC to focus its efforts on areas where it believes it can help drive meaningful change, whilst taking into account experience from policy implementation over time.

### Introduction

In October 2020, HSBC set out an ambition to align its financed emissions – the greenhouse gas emissions of its portfolio of customers – to net zero by 2050 or sooner, to help limit global warming to 1.5°C. In order to achieve this, the bank will use science-based pathways, aligned with the goals and timelines of the Paris Agreement (“HSBC's NZ50 Target").

The Policy seeks to achieve two objectives:
1.  to phase out the financing of thermal coal-fired power and thermal coal mining by 2030 in markets in the European Union ("EU") / Organisation for Economic Cooperation and Development (“OECD”), and by 2040 in other markets (“Phase-Out Commitment"); and
2.  to support HSBC's customers, including many emerging economy customers, to meet growing energy demand whilst transitioning energy systems from coal towards a clean energy future.

For many emerging economies today, the current share of thermal coal in electricity supply is high, energy demand is growing and phasing out thermal coal will be a long and complex process. Affordability and security of energy supply need to be a cornerstone of thermal coal phase out and will require, in parallel, an acceleration of investment into clean fuels, renewables and electrification.

Engagement with clients on their transition plans is therefore a priority method for HSBC to influence the transformation of the energy sector towards a clean and secure future, recognising the local realities in the communities we serve and with differentiated 2030/40 timelines for phasing out the financing of thermal coal-fired power and thermal coal mining in EU/OECD and other markets. This will require regular engagement on transition plans, being clear on what we will and won't finance, and helping clients to finance and invest in the technologies and infrastructure needed to succeed in the transition.

Pursuant to this Policy, HSBC reports progress in fulfilling the Phase-Out Commitment (Section A); assesses clients' transition plans in relation to HSBC's NZ50 Target (Section B); and applies controls to the provision of financing and advisory services (Section C).

### Scope and Definitions

*Italicised* terms used in this Policy are defined in the Glossary.

**HSBC:** This Policy applies to HSBC Holdings plc and its subsidiary undertakings.

**Client(s):** This Policy applies to clients that are corporate entities (including state-owned enterprises) or trusts that own, control or operate (or intend to own, control or operate) thermal coal mines, thermal coal-fired power plants or coal to gas / liquids plants (together, thermal coal assets).

If an existing or prospective client is part of a wider group, HSBC will take into consideration the activities of the *client group* and apply this Policy to the extent appropriate in light of the organisational structure and governance of the *client group*.

The Policy does not apply to clients or prospective clients engaged in *exempted activities*.

This Policy applies to *finance (or financing)* and *advisory services*. Unless in conflict with fiduciary or other regulatory obligations, all relevant HSBC entities, products and businesses, including asset management, are seeking to implement policies that support the transition from thermal coal-fired power and thermal coal mining within HSBC's 2030/40 timelines².

Any reference to a year means 31 December of that year.

## Section A: Annual Review, Disclosures, Targets and Governance

HSBC will review the Policy at least annually to ensure that it remains aligned with the Phase-Out Commitment. The annual review will include consideration of changes in relevant external factors (e.g. changes in the scientific assessment of climate change impacts, transition pathways, scenarios and future risk or changes in governmental or regulatory treatment).

HSBC intends to report annually on progress in reducing *financing* in line with the Phase-Out Commitment.

Using 2020 as our baseline, HSBC intends to reduce *thermal coal financing* drawn balance exposure by at least 25% by 2025, and aims to reduce it by 50% by 2030. These targets will be reviewed in conjunction with assessments of *client transition plans*. Any remaining *thermal coal financing* exposure after 2030 will only relate to clients with *thermal coal assets* outside EU and OECD markets and will be phased out by 2040. We are continuing to assess the reliability of our data and review our basis of preparation with the aim of reporting relevant *thermal coal exposures* aligned to the Policy in future disclosures.

HSBC has defined an interim 2030 target to reduce absolute on-balance sheet financed emissions for *thermal coal mining* by 70% from a 2020 baseline³. The financed emissions target is aligned with the 2050 net zero emissions pathway of the International Energy Agency (IEA), calculated to limit global warming to within 1.5°C. We have used a 2020 baseline to align with the baseline year used for our *thermal coal financing* drawn balance exposure targets.

In 2022, HSBC set a separate target to reduce on-balance sheet financed emissions for *thermal coal-fired power*. However, upon further review, we confirmed that the majority of *thermal coal-fired power* entities in scope are included in HSBC's on-balance sheet financed emissions target for the power and utilities sector. To avoid duplication, we have therefore decided to discontinue tracking and reporting *thermal coal-fired power* financed emissions separately.

This Policy will be implemented as part of HSBC's risk framework, which includes formal governance committees at global, regional and country levels.

## Section B: Client Transition Plans

HSBC engages with clients and expects them to formulate and publish transition plans that are consistent with HSBC's targets and commitments:
*   HSBC's assessment of *clients' transition plans* is based on factors including: level of ambition to reduce greenhouse gas emissions; clarity of transition strategy, including metrics, governance and targets; adequacy of disclosure; credibility of any proposed *abatement assumptions*; *abated power generation*; and consideration of principles of just transition.
*   For P&U *clients* with *thermal coal-fired power plants*, HSBC's *client transition plan* assessments will be based on their plans to decarbonise and consistency with HSBC's targets and commitments including evaluating the set of factors set out in the Energy Policy.
*   For *thermal coal mining* *clients*, HSBC's assessment of *clients' transition plans* will be based on their plans to decarbonise and consistency with HSBC's targets and commitments, including but not limited to the below factors:
    *   plans related to the development of new mines or expansion of existing mines
    *   plans to reduce scope 1 and 2 emissions including coal mine waste gas and fugitive emissions
    *   plans to deploy capital into clean energy and broader decarbonisation activities; and
    *   consideration of principles of just transition.

HSBC has completed most assessments relating to *clients*. These are intended to be updated and reviewed annually as needed thereafter.

HSBC recognises that state-owned enterprises in markets outside the EU and OECD may be subject to different national development planning cycles and in such cases, HSBC will take those planning cycles into account where appropriate. Such cases will be subject to annual review to enable HSBC to monitor that sufficient progress on transition planning is being made. This will not impact or alter HSBC's Phase-Out Commitment timelines.

HSBC will conduct appropriate due diligence in carrying out the assessments of *client transition plans*. Assessments will be reviewed by relevant governance committees as needed and, where appropriate, external independent review of assessments will be sought. Our requests will have deadlines and, if no transition plans are produced, or, if after repeated engagement, a *client transition plan* is not consistent with HSBC's targets and commitments, HSBC will not provide *new financing or new advisory services* to that *client* and will need to formally assess whether we continue to provide *financing* for that *client*.

Given the importance of energy transition to the achievement of global climate ambitions, HSBC expects *clients* to have published their transition plans by the end of 2023. HSBC also expects *clients* to provide regular (usually annual) detailed disclosures to HSBC regarding the implementation and evolution of their transition plans. Exceptions in relation to publication and disclosure expectations will be considered by HSBC on a case-by-case basis (for example, taking into consideration the national climate plans of the markets in which the client operates).

## Section C: Controls on Financing and Advisory Services

### Existing Clients

*Financing* of existing *clients* will be reviewed annually in conjunction with the *client transition plan* assessment process. HSBC will discuss options with *clients* in order to agree a phase-out timeline, taking into account HSBC's contractual obligations and the liquidity needs of the *client*.

HSBC will not provide *new finance, or new advisory services*, for the specific purposes of activities that do not align with HSBC's Phase Out Commitment timelines as outlined below:
*   creation of *new thermal coal assets*;
*   *thermal coal expansion*;
*   extensions to the unabated operating lifetime of existing *thermal coal assets*;
*   *new captive thermal coal-fired power plants* or *new captive thermal coal mines*;
*   conversion of existing *coal-to-gas-fired power plants*, unless a) the *client* demonstrates to HSBC its intention to achieve *abated power generation* and b) the plants do not operate in environmentally and socially critical areas;
*   *new thermal coal infrastructure*;
*   *new metallurgical coal mines*; or
*   *thermal coal assets* or *metallurgical coal mines* operating in environmentally and socially critical areas or using *Mountaintop Removal* (including *clients* who derive more than 30% of their annual revenues from *Mountaintop Removal* *coal mining*).

HSBC will seek to withdraw, as soon as possible, any *financing and advisory services* with a *client* that has made or makes a *new commitment to thermal coal expansion*; or has proceeded or proceeds with *thermal coal expansion*. In such cases, if the *client* is part of a *client group*, HSBC will seek representations from the *client/client group* that *new finance or new advisory services* provided by HSBC to other members of the *client group* will not be used for *thermal coal expansion* and this will require pre-approval by the relevant governance committee.

In addition, for EU and OECD markets only, HSBC will not provide *new finance or new advisory services* where the *client's* *thermal coal related revenues* are greater than 40% of total revenues (or 30% of total revenues by 2025), unless the *new finance or new advisory services* are to be used for the specific and demonstrable purpose of *financing clean technology or infrastructure* aligned with HSBC's Phase-Out Commitment timelines and HSBC's targets and commitments as part of the *client's* transition. This is particularly so, given our intent to have exited *thermal coal assets* in EU/OECD markets by 2030.

For non-EU/OECD markets, HSBC is not setting materiality thresholds, as we will evaluate the detail of the transition plans our *clients* produce and their consistency with HSBC's targets and commitments. HSBC's run down trajectory in non-EU/OECD markets will be guided by these plans and will be consistent with an end date of 2040. HSBC recognises that given the length of time to 2040, some non-EU/OECD *clients* may not yet have announced a phase out date, however HSBC expects *clients* to demonstrate plans to phase down their *thermal coal assets*, whilst increasing investment into *clean technology and infrastructure* where applicable. This will not impact or alter HSBC's Phase-Out Commitment timelines.

### Prospective Clients

HSBC will not start a *new relationship* with a prospective *client* with one or more of the following characteristics:
*   *mining*, where i) *thermal coal related revenues* are $\geq$10% of total revenues; or ii) annual *thermal coal production* is $>5$Mt; or iii) *thermal coal*, as a by-product from the extraction of *metallurgical coal*, is $>15\%$ of total production volumes;
*   *power*, where operational *thermal coal power generating capacity* is either i) $\geq$10% of total generating capacity; or ii) $\geq$1GW;
*   *coal to gas / liquids*, where *coal-related revenues* are $\geq$10% of total revenues;
*   the prospective *client* operates *thermal coal assets* in *environmentally and socially critical areas*; or
*   the prospective *client* declines to engage sufficiently on its *transition plan*, or if HSBC determines that the prospective *client's transition plan* is not consistent with HSBC's targets and commitments

except for the purposes of materially reducing greenhouse gas emissions in line with HSBC's Phase-Out Commitment timelines and HSBC's targets and commitments, including by enabling the early retirement of existing *thermal coal assets*.

### Enhanced Due Diligence (EDD) for existing clients

EDD and pre-approval by a relevant *governance committee* will be required for *new finance or new advisory services* for any *client* with one or more of the following characteristics (except where the *finance or advisory service* is specifically provided for activities unrelated to *thermal coal*):
*   *mining*, where either i) *thermal coal related revenues* are $\geq$20% of total revenues; or ii) annual *thermal coal production* is $>10$Mt;
*   *power*, where operational *thermal coal power generating capacity* is either i) $\geq$20% of total generating capacity; or $\geq$1GW;
*   *coal to gas / liquids*, where *coal-related revenues* are $\geq$20% of total revenues; or
*   the *client* is involved in the construction of a *new thermal coal asset*, where such construction started or was contractually committed (via *power purchase agreement for thermal coal-fired power plants*) before 01 January 2021 (as detailed above, HSBC will not *finance the creation* of a *new thermal coal asset*).

EDD and pre-approval by a relevant *governance committee* will be required for *new finance or new advisory services* for the specific purposes of:
*   expansion of existing *metallurgical coal mines*;
*   conversion of existing *coal-to-gas-fired power plants*;
*   early retirement, sale, purchase or refinancing of *thermal coal assets* to materially reduce greenhouse gas emissions (EDD will include consideration of any proposed *abatement assumptions*); or
*   *new finance or new advisory services* for a *client group* where it is known that any part of the *client group* is engaged in activities that do not align with HSBC's Phase-Out Commitment timelines. In such circumstances, HSBC will seek additional representations from the *client/client group* that *new finance or new advisory services* provided by HSBC will not be used for such activities.

### Enhanced Due Diligence (EDD) for prospective clients

EDD and pre-approval by a relevant *governance committee* will be required for any *new relationship* with a prospective *client*.

### Thermal coal projects

The Equator Principles, to which HSBC is a signatory, will be applied to any *financing* that meets Equator Principles criteria. This is designed to enable HSBC to identify, assess and manage potential environmental and social risks and impacts associated with such projects, including those risks and impacts related to human rights, climate change, and biodiversity.

## Glossary

The following definitions apply to the Policy⁵:

| Term | Definition |
| :--- | :--- |
| **abated power generation** | Where power plants are projected to continue or potentially continue operating beyond 2035 in EU/OECD markets or beyond 2040 in other markets, such power plants are expected to be *abated*, by these respective dates, through the use of credible *abatement technologies* and assessed in the operating context of the asset such as: converting fossil fuel fired power plants to operate on zero-carbon fuels (e.g. green hydrogen, green ammonia and other technologies as they may develop); and carbon removal technologies including carbon capture and storage (CCS). |
| | These power plants include gas-fired power plants, oil-fired power plants, biomass-fired plants or energy from waste. |
| | With regards to *thermal coal-fired power plants*, in line with HSBC's Phase Out Commitment, HSBC will fully phase-out the *financing* of *thermal coal-fired power* by 2030 in EU/OECD markets and by 2040 in other markets. Where *thermal coal-fired power plants* are projected to continue or potentially continue operating beyond 2030 in EU or OECD markets or beyond 2040 in other markets, such *thermal coal-fired power plants* are expected to additionally meet the following requirements: |
| | *   not generating revenues, beyond 2030 or 2040 (whichever is applicable), greater than 5% of the *client's* total revenues; and |
| | *   not receiving any direct or indirect (e.g. via *financing* provided to a parent company) *finance* from HSBC. |
| **abatement assumptions** | Assumptions covering aspects such as: i) technologies identified (e.g. carbon capture and storage); ii) if available, track record for deploying the technologies; iii) availability and scale of deployment of the technologies proposed; and iv) any socio-economic risks associated with the technologies identified. |
| **advisory services** | The provision of (or when considering the provision of) financial or investment banking *advisory services* to *clients*. |
| **Amazon Biome** | *Amazon Biome* is defined in accordance with guidance set out by the Amazon Network of Georeferenced Socio-Environmental Information (RAISG) as: i) the limits of the *Amazon biome* in Colombia and Venezuela; ii) the limits of the *Amazon basin* in Ecuador, Perú and Bolivia; iii) the sum of the limits of the basins (Amazonas and Araguaia/Tocantins) and the limits of the administrative Legal *Amazon* in Brazil; and iv) the whole continental territories of Guyana, French Guyana and Suriname. See further geospatial guidance on this definition at https://www3.socioambiental.org/geo/RAISGMapaOnline/. |
| **Antarctic** | All of the land and ice shelves south of 60°S latitude, which are administered under the Antarctic Treaty System. |
| **Arctic** | The Arctic is the geographic area north of the Arctic polar circle (currently 66°33′N). |
| **captive thermal coal-fired power plants** | *thermal coal-fired power plants* dedicated to a specific project or industrial facility, such as an aluminium smelter, a steel mill or cement plant. |
| **captive thermal coal mines** | *thermal coal mines* dedicated to providing *thermal coal* for *captive thermal coal-fired power plants*. |
| **clean technology or infrastructure** | Clean technology or infrastructure are those aligned with HSBC's targets and commitments and which support abating greenhouse gas emissions to net zero, including: converting fossil fuel fired power plants to operate on zero-carbon fuels (e.g. green hydrogen, green ammonia and other technologies as they may develop) renewable energy carbon removal technologies such as carbon capture and storage (CCS); and reduction or elimination of scope 1 and 2 emissions including methane. |
| **clients** | As defined in "Scope and Definitions". The Policy also applies to in-scope *clients* that are seeking, so far as HSBC is aware, to own, control or operate *thermal coal assets*. This policy does not apply to individuals. |
| **coal services** | Coal trading, coal logistics, coal processing, transmission from *thermal coal-fired power plants*, coal-related operation & maintenance (O&M) services, coal mining services, coal-related engineering, procurement and construction services, coal exploration, coal equipment manufacturing and *coal advisory services*. |
| **coal to gas / liquids plant** | An industrial plant or facility that converts coal into coal gas, liquid hydrocarbons, liquid fuels or petrochemicals. This includes (but is not limited to) the gasification of coal for the production of hydrogen. |

| Term | Definition |
| :--- | :--- |
| **new coal to gas / liquids plant** | *new coal to gas / liquids plant* means: i) the creation of *new coal to gas / liquids plants*; or ii) expansions to existing *coal to gas / liquids plants* (except for the purpose of retrofitting an asset to materially reduce greenhouse gas emissions) that was not already either: a) contractually committed or b) under construction, in each case before 1 January 2021. |
| | The terms *coal to gas / liquids plant* and *new coal to gas / liquids plant* do not include *exempted activities*. |
| **conversion of existing coal-to-gas-fired plants** | Modifications to a *thermal coal-fired power plant* to introduce gas-firing capability, including: switching to operate only on natural gas, co-firing (able to fire both *coal* and *natural gas* at the same time) or dual fuel (able to fire either *coal* or *natural gas*), with the requirement to fully phase-out the *financing* of *thermal coal-fired power* by 2030 in EU/OECD markets and by 2040 in other markets, in line with this Policy. |
| **exempted activities** | Means the following: *   existing *captive thermal coal-fired power plants*; *   existing *captive thermal coal mines*; *   *coal services*; *   underground *coal gasification* (*coal bed methane*); and *   all other activities of *clients*. |
| | For the avoidance of doubt, the Policy does apply to *clients* engaged in *new captive thermal coal-fired power plants* and *new captive thermal coal mines*. |
| **environmentally and socially critical areas** | *Amazon Biome*, *Antarctic*, *Arctic*, *Ramsar Wetlands* or *UNESCO World Heritage Sites*. |
| **finance or financing** | The provision of (or when considering the provision of) project *finance*, direct lending, or arranging or underwriting of capital markets transactions to *clients*. |
| **new finance or financing** | *New finance or financing* means the provision of *new finance* to a *client*, including the refinancing of *existing finance* facilities. |
| **governance committee** | A formal, internal, risk *governance committee* that exists at either global, regional or country level across HSBC's global businesses to provide recommendations and advice on *customers*, transactions and wider reputational risks. These *committees* form part of HSBC's risk framework. |
| **HSBC's targets and commitments** | HSBC's targets and commitments means HSBC's NZ50 Target and 2030 *thermal coal mining*, O&G and P&U financed emissions targets. |
| **metallurgical coal mines** | *Coal mines* where 30% or less of either production or the *coal reserve* is *thermal coal*. |
| **new metallurgical coal mines** | *new metallurgical coal mines* means: i) the creation and *commercialisation* of *new metallurgical coal mines* or major capital equipment for *new metallurgical coal mines*; or ii) expansions to existing *metallurgical coal mines* that involve geographically separate locations and/or major *new infrastructure* that was not already either: a) contractually committed or b) under construction, in each case before 1 January 2021. |

| Term | Definition |
| :--- | :--- |
| **metallurgical coal activities** | *Metallurgical coal activities* involved in the *metallurgical coal value chain*, including use of *metallurgical coal* in manufacturing (e.g. iron and steel). *Metallurgical coal* is also known as “coking *coal*”. |
| **Mountaintop Removal** | A form of surface mining at the summit or summit ridge of a mountain in the Central Appalachian Mountains of the United States of America. |
| **Ramsar Wetlands** | *Ramsar Wetlands* are those registered as under threat on the Montreux Record, as per the *Ramsar Convention*. |
| **thermal coal assets** | *thermal coal mines*, *thermal coal-fired power plants* and *coal to gas / liquids plants*. |
| **new thermal coal assets** | *new thermal coal assets* means *new thermal coal mines*, *new thermal coal-fired power plants* and *new coal to gas / liquids plants*. |
| **thermal coal expansion** | Means expansion via *new thermal coal assets* and/or expanding existing *thermal coal assets*, as per: i) for *thermal coal mining*, increases in total tonnage of *thermal coal* extracted; ii) for *coal to gas / liquid production*, increases in total tonnage of *thermal coal* utilised; or iii) for *power*, increases in net operational *thermal coal power* capacity, in each case where such expansion: *   was not already either: (a) contractually committed (via *power purchase agreement for thermal coal-fired power generation*); or (b) under construction, in each case before 01 January 2021; and *   does not include *exempted activities*. |
| | This includes expansion via corporate mergers and acquisition unless the *client* has confirmed phase-out of these assets will be line with HSBC's 2030/40 timelines, and the transaction does not involve a global increase in tonnage or power capacity as in i) to iii) above. |
| **thermal coal-fired power plants** | *Thermal power plants* which burn *thermal coal* to generate electricity. |
| **new thermal coal-fired power plants** | *new thermal coal-fired power plants* means: i) the creation of *new thermal coal-fired power plants*; or ii) expansions to existing *thermal coal-fired power plants* (except for the purpose of retrofitting an asset to materially reduce greenhouse gas emissions) that was not already either: a) contractually committed or b) under construction, in each case before 1 January 2021. |
| | The terms *thermal coal-fired power plants* and *new thermal coal-fired power plants* do not include *exempted activities*. |
| **thermal coal infrastructure** | *Infrastructure assets* dedicated to support *thermal coal assets*, such as *coal terminals* or *coal railways*. |
| **new thermal coal infrastructure** | *new thermal coal infrastructure* means: i) the creation of *thermal coal infrastructure*; or ii) expansions to existing *thermal coal infrastructure* (except for the purposes of retrofitting an asset to materially reduce greenhouse gas emissions) that was not already either: a) contractually committed or b) under construction, in each case before 1 January 2021. |

| Term | Definition |
| :--- | :--- |
| **thermal coal mines** | All *mines* where more than 30% of either production or the *coal reserve* is *thermal coal*. |
| **new thermal coal mines** | *new thermal coal mines* means: i) the creation and *commercialisation* of *new thermal coal mines* or major capital equipment for *new thermal coal mines*; or ii) expansions to existing *thermal coal mines* that involve geographically separate locations and/or major *new infrastructure* that was not already either: a) contractually committed or b) under construction, in each case before 1 January 2021. |
| | The terms *thermal coal mines* and *new thermal coal mines* do not include *exempted activities*. |
| **UNESCO World Heritage Sites** | Designated cultural and natural heritage areas around the world which are considered of outstanding value to humanity and are listed under the World Heritage Convention⁷. |

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¹ The Policy is made public for information only. HSBC's sustainability risk policies are for HSBC's use only and HSBC shall owe no liability to third parties in relation to them.
² Please refer to https://www.assetmanagement.hsbc.com.hk/en/institutional-investor/about-us/responsible-investing/policies for HSBC's asset management approach to thermal coal.
³ In accordance with industry guidelines, we plan to set targets in five year increments after 2030. The methodology and data used to assess financed emissions and set targets is new and evolving, and we expect industry guidance, market practice, and regulations to continue to change. Our initial set of baselines and targets may require updating as data availability changes over time and climate science evolves. For further details of our approach and methodology, see our Financed Emissions Methodology at https://www.hsbc.com/who-we-are/esg-and-responsible-business/esg-reporting-centre.
⁴ https://equator-principles.com/about-the-equator-principles/
⁵ In HSBC's 2021 Notice of Annual General Meeting, the terms "coal-fired power" and "thermal coal mining" were used. In this Policy, "coal-fired power" means *thermal coal-fired power plants* and "thermal coal mining" means *thermal coal mines*, as defined in this Glossary.
⁶ https://rsis.ramsar.org/ris-search/?f%5B0%5D=montreuxListed b%3Atrue&pagetab=1
⁷ https://whc.unesco.org/en/list/

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# Important notice

The Policy should not form the basis of any third party's decision to undertake, or otherwise engage in, any activity and third parties do not have any right to rely on it. The Policy, by its nature, is not comprehensive and has not been independently verified. It contains various statements that are or could be "forward-looking” statements including as to HSBC's intentions and objectives. However, a number of risks, uncertainties and other important factors could cause actual developments and / or results to differ materially from HSBC's expectations. These include, among others, the risks and uncertainties we identify in our Annual Report and Accounts filed with the Securities and Exchange Commission (“SEC”) on Form 20-F and interim reports and earnings releases furnished to the SEC on Form 6-K from time to time.

In making the assessments and determinations further described in the Policy, HSBC will use such information as it determines necessary and relevant, in its sole discretion. However, there can be no guarantee of the accuracy, currency or completion of such information, which may not have been independently verified.

In making the assessments and determinations described in the Policy, and in order to track and report on our progress against the ambitions, commitments and targets in the Policy, HSBC relies on internal and, where appropriate and available, external data sources, guided by certain industry standards. While reporting on these matters has improved over time, data remains of limited availability, quality and consistency. Methodologies and scenarios HSBC uses may develop over time in line with market practice, regulation and/or developments in science, where applicable. Any such developments in methodologies or scenarios, or changes in the availability and quality of data over time could result in revisions to reported data going forward, including on financed emissions, meaning that such data may not be reconcilable or comparable year-on-year. This could also result in HSBC having to re-evaluate its progress towards its ambitions, commitments and targets in the future.

Neither HSBC nor any of its officers, employees, agents or advisers ("HSBC Group”) accepts any duty of care, responsibility or liability in relation to the Policy or its application or interpretation, including as to the accuracy, completeness or sufficiency of it or any outcomes arising from the same. No representations or warranties, express or implied, are made by the HSBC Group as to the accuracy, completeness or correctness of the Policy, the information in the Policy, HSBC's application or interpretation of it or as to the achievement or reasonableness of any forward-looking statements. HSBC Group does not accept any liability to any party for any loss, damage or costs howsoever arising, whether directly or indirectly, whether in contract, tort or otherwise from any action or decision taken (or not taken) as a result of any person relying on or otherwise using this Policy or arising from any omission from it.

Save as expressly set out in the Policy, HSBC is not under any obligation and does not give any undertaking to provide any additional information in relation to the Policy or its application, to update the Policy or to correct any inaccuracies or errors. Any forward-looking statements made by or on behalf of HSBC speak only as of the date they are made. HSBC expressly disclaims any obligation to publicly revise or update any forward-looking statements, other than as expressly required by applicable law. HSBC reserves the right, without giving reason, to amend the Policy at any time.

© HSBC Holdings plc 2024