HSBC to stop financing most new coal plants, oil sands, arctic drilling

Europe's largest bank HSBC

said on Friday it would mostly stop fundingnew coal power plants, oil sands and arctic drilling, becomingthe latest in a long line of investors to shun the fossil fuels.

Other large banks such as ING and BNP Paribas have madesimilar pledges in recent months as investors have mountedpressure to make sure bank's actions align with the ParisAgreement, a global pact to limit greenhouse gas emissions andcurb rising temperatures.

"We recognise the need to reduce emissions rapidly toachieve the target set in the 2015 Paris Agreement… and ourresponsibility to support the communities in which we operate,"Daniel Klier, group head of strategy and global head ofsustainable finance, said in a statement.

HSBC said it would make an exception for coal-fired powerplants in Bangladesh, Indonesia and Vietnam.

"There's a very significant number of people in those threecountries who have no access to any electricity," HSBC CEO JohnFlint told HSBC shareholders at the bank’s annual generalmeeting in London on Friday.

"The reasonable position for us is to allow a short windowfor us to continue to get involved in financing coal there… ifwe think there is not a reasonable alternative," he said.

Aside from the coal exemptions environmental campaignersGreenpeace welcomed the move and said HSBC's new energy strategywould prevent it from providing project finance for TransCanadaCorp's proposed $8 billion Keystone XL oil pipeline toNebraska.

"This latest vote of no-confidence from a major financialinstitution shows that tar sands are becoming an increasinglytoxic business proposition," John Sauven, executive director ofGreenpeace UK said in a statement.

(Reporting By Susanna Twidale; Additional reporting by LawrenceWhite; Editing by Susan Fenton)