Ladies and gentlemen, good morning and a warm welcome to the 2019 Annual General Meeting for HSBC Holdings plc. I'm particularly pleased to see that so many shareholders have been able to join us here in Birmingham. HSBC's ties with Birmingham date back 183 years to when the Birmingham and Midland Banking Company first opened its doors for business. Between 1836 and 1898, the Midland Bank held AGMs at a number of different venues across the city. These included a purpose-built head office, which opened in 1869. The building still stands on New Street and it remains a local landmark. It now houses the Apple Store. In 2018, we reached a significant new milestone with the opening of HSBC U.K., our ring-fenced bank here in the city. HSBC is pleased to reaffirm its commitment to Birmingham by holding this meeting here today.
I would like to begin with two items of housekeeping. First, Henri de Castries is sadly unable to join us and attend today's meeting, and has asked me to pass on his apologies. He has other commitments in respect of the AGM of another company, of which he is the Senior Independent Director. Second, lunch will be available when the meeting closes at around 12:30 P.M., and I hope as many of you as possible will join me and my fellow Directors to continue any discussions. Turning to the formal business of the meeting, I will ask John Flint to provide his perspective on 2018 in a few minutes. Let me first provide some reflections of my own. Our 2018 results demonstrated both the underlying health of the business and the potential of the strategy John announced in June last year.
Despite a particularly challenging external environment in the fourth quarter of 2018, all of our global businesses delivered increased profits in 2018 and higher returns on tangible equity year-on-year. Overall, the Group delivered higher reported and adjusted profit before tax, and this allowed the Board to approve a fourth interim dividend of $0.21, bringing the total dividend for 2018 to $0.51. I completely understand how important the dividend is to our shareholders, so let me reiterate our policy to sustain the dividend at its current level for the foreseeable future. I would also like to remind you that by declaring interim dividends, which has been our practice for a number of years, we can ensure you benefit from that dividend sooner than would be the case if we had to seek approval at general meetings.
With regard to the Board, there have been a number of changes since our last meeting. I would like to welcome José Antonio Meade, who joined the Board as an Independent Non-Executive Director on the 1st of March. Pepe brings a wealth of experience gained across a number of key policy areas, and his background and knowledge of Latin America will be of great assistance and value to HSBC. I would also like to welcome Ewen Stevenson, following his appointment as Group Chief Financial Officer, replacing Iain Mackay. Ewen brings extensive international experience and a strong and proven track record as a Chief Financial Officer. I would also like to thank Jon Symonds for agreeing to become Deputy Group Chairman. Finally, we have announced that Jonathan Evans will retire and will therefore not be seeking re-election today.
I am very grateful to both Iain and Jonathan for their important and valuable contributions to HSBC. Iain as Group Finance Director, and Jonathan, particularly latterly, as Chair of the Financial Systems Vulnerabilities Committee. Following Jonathan's retirement, the number of directors on the board will reduce from 17 a year ago to 14 today. That means subject to the election and re-election of directors today, your board will comprise a non-executive chairman, three executive directors, and 10 independent non-executive directors. Our focus remains on creating clearer and stronger lines of accountability and authority and sharpening the board's oversight of performance and progress against the new strategy. Looking at the current environment, the global economy is much less predictable now than it was a year ago.
Global growth is slowing, largely as a result of weakness in Europe, although the economic outlook is also softer in the U.S. and in Asia. The system of global trade remains subject to political pressure, and differences between China and the U.S. are likely to continue to inform sentiment through the rest of 2019. We hope that the ongoing dialogue between Washington and Beijing has a positive outcome. In the meantime, we are focused on helping our customers to navigate the present uncertainties and make the most of the opportunities that unquestionably exist. Some of these opportunities stem from initiatives underway to lower barriers to trade. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the EU's landmark bilateral agreements with Japan and Singapore. The potential revisions to the U.S., Mexico, Canada agreement provide important counterweights that could give impetus to international trade in the year ahead.
They also underline that support for the values of openness and cooperation, which have been present throughout the very long history of commerce across the world, remain in place. The structural and financial reforms underway across Asia will continue to support economic development in that region. The National People's Congress last month outlined a series of further steps that China will take to liberalize its financial markets. While forming part of China's response to changing external conditions, they are also part of the much longer process of gradual reform and opening up that has transformed the Chinese economy and created opportunities for domestic and international customers and investors. The U.S. economy and the influence of the Federal Reserve remains central to global sentiment, and we expect policymakers to adopt a more cautious stance through the rest of 2019.
Finally, many of our U.K. customers are understandably cautious about the immediate future, given the uncertainty surrounding Brexit. Uncertainty which seems likely to continue for some time. We continue to monitor events closely and plan accordingly across our European operations to ensure that the service we provide to our customers is not affected. While there are undoubtedly more risks to global economic growth than this time last year, we remain alert and continue to model and anticipate a wide range of scenarios as part of our risk management. Our strong balance sheet, revenue base, and footprint equip us to evaluate these risks, allocate resources appropriately, and most importantly, enable us to help our customers navigate their own paths. Enabling our people to do their jobs to the best of their ability is an essential part of our capacity to support our customers.
John will explain shortly how helping our people to fulfill their potential is one of management's strategic priorities. This is also a priority for the board and for me personally, because it's so important to our present and future success. John and his management team have the board's full support in working to realize this ambition. Before I hand over to John, let me make three points about the formal business of the meeting ahead of us. Firstly, we are using a new approach to voting at today's meeting. In a change from our usual process, voting on all resolutions set out in the 2019 notice of meeting will be opened after the opening speeches and before we start taking questions. I'll come back and tell you exactly when that is.
What this means is that you may cast your votes whenever suits you during the hour or so of Q&A. Voting will then be closed after we have taken your questions, I will announce the headline results based on the total number of votes cast before the meeting and here in person today, before we close. Many of you may be familiar with this approach, which has been used at other FTSE 100 company AGMs. I will come back and explain the voting process in more detail before I open the voting. Secondly, resolution three concerns the new Directors' Remuneration Policy. At the 2016 AGM, shareholders overwhelmingly approved our remuneration policy, which has been in force since that time, but which expires today at the end of its three-year term.
As set out in the Directors' Remuneration Report on pages 172 to 205 of the annual report and accounts, the Group Remuneration Committee is recommending your approval of a new directors' remuneration policy. After John's opening remarks, the Chair of the Group Remuneration Committee, Pauline van der Meer Mohr, will set out the key points of the policy and developments since the policy was published. Third, resolution 17 concerns the state deduction for the pensions paid to former Midland Bank employees. While we appreciate the Midland Clawback Campaign group for their constructive engagement, we cannot support this resolution, we recommend that shareholders vote against it. We understand this issue is very important, that many of the people involved devoted substantial portions of their working lives to Midland Bank and then to HSBC.
We have given it a significant amount of time and consideration, have listened carefully to the points raised by the campaign group, as well as those made by MPs on behalf of their constituents. We must be fair and equitable to all remaining 140,000 members of a U.K. pension scheme. More than half of whom are defined contribution members, not just to those final salary members who would benefit if the state deduction ceased. Before we decided not to support the resolution, we very carefully reviewed our position and took advice from external legal counsel, after which the board concluded that this resolution is not in the best interest of all shareholders. We have therefore recommended that shareholders vote against Resolution 17. We've set out our reasoning very clearly in Appendix four on page 36 on the notice of meeting.
I would like to end by thanking the board, John, and each of the 235,000 people who work for HSBC. In my first full year as Group Chairman, I've been enormously impressed by the work ethic, commitment, dedication, and talent of our people, and I'm very grateful to each of them for the excellent work that they do in service of the bank, our customers, and each other. Our challenge and shared purpose is to build on that good work for the rest of 2019 and beyond. I have every confidence we can do so. You'll have an opportunity to vote and ask questions later. In the meantime, and first, let me hand over to John. Thank you.
Thank you, Mark. Good morning, ladies and gentlemen. Let me add my thanks to you for joining us here in Birmingham. As Mark said, Birmingham has played an important role in HSBC's past, and we also believe it can be just as significant to our future. Last year, we opened the new headquarters for HSBC U.K., our ring-fenced bank here in Birmingham. We are confident that Birmingham can help HSBC to grow, and that we, in turn, can help this city to write the next chapter of its own story. As Mark signaled, HSBC delivered a good set of results in 2018. We grew revenue in our four global businesses, which in turn helped deliver reported profit before tax of $19.9 billion, up 16% on the prior year. Adjusted profit before tax was $21.7 billion, an increase of 3%.
return on tangible equity was 8.6%, up significantly from the 6.8% delivered in the prior year. This is a good first step towards achieving our overall return on tangible equity target of over 11% by the end of 2020. Adjusted jaws was negative for 2018, which means that our costs grew at a faster rate than revenue. Adjusted costs were broadly as we expected for the full year, Adjusted revenue fell short due to market weakness in the fourth quarter. Positive jaws remains an important discipline, and we remain committed to achieving this target in 2019. Our common equity Tier 1 ratio of 14% was lower than at the same point in 2017, due mainly to adverse foreign exchange movements and the impact of increased lending.
We returned a total of $2 billion to shareholders through share buybacks in 2018, reflecting our desire to neutralize the impact of scrip dividends over the medium term. We remain committed to this policy and to maintaining a broadly stable share count over the medium term, subject to regulatory approval. The eight strategic priorities that I announced in June last year were important factors in our 2018 results. While our plan targets clear financial outcomes, it has our customers at its center. We want to bring more of HSBC to more people and to serve them in the best possible way. I'm encouraged by our progress so far. We're growing customer numbers and capturing market share in our scale markets and from our international network. International client revenue was up 7% on the prior year, We made a strong start in accelerating growth from our Asian franchise.
Overall adjusted revenue in Asia was up by 11% on the prior year, with double-digit growth in Hong Kong, mainland China, and the Pearl River Delta. We have improved our capital efficiency, although our U.S. business is short of where we want it to be, it is moving in the right direction. Our investment in technology is making our business simpler, safer, and easier for our customers to use. We are already seeing results, with around 45% of retail customers now using our digital channels, which also account for more than 30% of sales. In commercial banking, we have halved the time it takes to onboard new clients. Here in the U.K., we launched our Connected Money app to enable customers to view balances and transactions from all of their U.K. bank accounts, including those with other providers in one place.
We also established our U.K. ring-fenced bank and grew our U.K. customer base in 2018. Finally, we are committed to creating stronger, healthier relationships with all of our stakeholders. Earlier this week, we published our latest ESG update, the fourth that we have produced, showing both the progress we've made and the areas where we still need to do better. How we support all 235,000 people who work for HSBC is one area where I am proud of the work we're doing, but eager to do more. In my first year in this role, I started a conversation throughout the bank about how we help our people become the best versions of themselves. This is part of a broader ambition to create what we call the healthiest human system in our industry. The early signs are positive.
In 2018, 66% of our employees said they would recommend HSBC as a great place to work, up from 64% the previous year. While this demonstrates an improvement in a relatively short space of time, it also shows that there is still room for further improvement. This work will continue throughout 2019 and beyond. If we're successful, and I'm confident that we will be, we should materially improve all aspects of HSBC's performance, including delivering our strategy and the financial targets. We have taken the first steps in getting HSBC back to growth. As Mark explained, the economic outlook has softened since our June 2018 strategy update, even since the third quarter of 2018. Let me build on what Mark said by adding three points.
First, the increased uncertainty and risk in the global economy today relates mainly to the U.K. economy, continuing global trade tensions, and the future path of interest rates. This is yet to translate into higher credit losses, but that could change if the global economy deteriorates. Second, we remain committed to the targets that we outlined in June last year. We will be proactive in managing costs and investment to meet the risks to revenue growth, but we will not take short-term decisions that harm the long-term interests of the business. We also have a business that is diversified, resilient, and well-placed to navigate the risks inherent in today's world. Third, the long-term drivers of revenue growth remain sound. The reforms that Mark mentioned will, in our view, ensure continued robust growth in China. The Greater Bay Area has become the centerpiece of China's economic development and integration program.
The region has a combined population of around 70 million people, a combined GDP of $1.5 trillion, this is expected to triple in size by the year 2030. Our work to build a scalable business in the Pearl River Delta means we are well-positioned to make a significant contribution to that. As barriers to trade increase in some parts of the world, they are falling rapidly in others, most notably in Asia. We're at the heart of financing the low-carbon transition, which will be one of the biggest drivers of global investment this century. HSBC is in a good position. The strategy is working, I'm encouraged by our progress, I'm confident for the year ahead. We remain focused on growing returns, meeting our return on tangible equity target by 2020, creating value for you, our loyal shareholders.
Let me hand back to Mark.
Thank you, John. I would now like to invite Pauline van der Meer Mohr, Chair of the Remuneration Committee, to say a few words about the Directors' Remuneration Report and policy. Pauline.
Thank you, Mark. Good morning, ladies and gentlemen. I would like to begin by thanking our shareholders on behalf of the committee for the constructive dialogue I've had with many of you over the last 12 months. Your willingness to engage with us and to provide feedback has been of considerable value in helping us formulate the new remuneration policy, which we believe meets both your requirements and your expectations based on the feedback we've had from you. We're asking you to approve two remuneration-related resolutions today. Resolution two covers the 2018 Directors' Remuneration Report, setting out the actual remuneration awarded to directors as detailed on pages 184 - 205 of the annual reports and accounts.
The approval and implementation of our current policy has received very strong support from shareholders in prior years. I would like to thank you shareholders for that. I hope that you see fit to support how it was implemented in 2018. Resolution three covers the new Directors' Remuneration Policy for the next three years, which is set out on pages 175-184 of the annual report. I'd like to set out some highlights of that new policy and also touch on the recent announcement that we made regarding the pension allowance paid to the three executive directors. This represents a development on the information which is included in the annual report and accounts. The committee undertook an extensive review of the policy with three key objectives in mind. Firstly, the new policy should be simple and transparent.
Secondly, it should maintain a strong alignment between executive rewards on the one hand, and the interest of our stakeholders, with a very large focus on long-term performance. Thirdly, it should be competitive to ensure that we can continue to retain and attract talent. As our current policy structure meets these objectives and received very strong shareholder support in the past, we have only proposed minor changes to the policy. These changes include using a simplified long-term incentive scorecard with fewer measures and a substantial proportion of the scorecard weighted towards our headline financial measures, such as return on tangible equity. The governance simplification initiatives led by Mark with the support of the board have inevitably resulted in an increase in the time commitment required by the remaining directors.
Those initiatives, along with the support provided by the board for HSBC's ambitious agenda, means that the expected time commitment for a director serving on two committees, which they typically do, is now 75 days a year. For committee chairs, it is up to 100 days per year. For the risk committee chair, it is now at least 150 days per year. As you can see, we are therefore proposing an increase in fees for our non-executive directors to reflect this significant additional time commitment. The last increase was in January 2017, and overall, the cost in 2019 for non-executive director fees will be broadly in line with 2018. As you will be aware, we have also been monitoring recent developments in respect of the pension allowances paid to the three executive directors.
Since our consultation with shareholders last year and the finalization of the Directors' Remuneration Report. This is relatively new. Although the further detailed guidance from the Investment Association on executive director pension contribution levels was only published in January of this year, we have to acknowledge that sentiment on this specific issue has shifted considerably. Given all of that, and having listened carefully to our stakeholders, the committee has now clarified that for any new director, any new executive director, the cash in lieu of pension allowance will reduce from 30%-10% of base salary. While the pension allowance paid to current executive directors is governed by existing contractual arrangements, the three executive directors also listened and reflected, and they feel it is appropriate that their allowance is reduced to 10% of salary with effect from the 1st of April 2019.
The committee remains very grateful to the EDs, for the executive directors for their initiative. However, we do need to be mindful of the fact that we are Europe's largest bank, and our obligation as a committee is to be cognizant of what we pay our executives within a global talent market. We believe the committee has acted quickly on a complex issue. I hope you will agree that this is the right thing for the business, for our employees, and for you, our shareholders. I would therefore encourage you to approve both these resolutions. I would be very happy to take your questions when the chairman allows. Mark, back to you.
Okay. Thank you, Pauline. Let me now explain the processes for voting and questions. As I explained earlier, voting on all resolutions set out in the 2019 notice of meeting will be open shortly. What this means is that you may cast your votes whenever suits you during the next hour or so while we answer your questions. All shareholders will have received a voting handset and smart card at registration. These will have been set up for you then. The welcome letter you received provides simple instructions on how to vote. As a reminder, you can cast your votes on each resolution by selecting the number of the resolution and then pressing button one if you are in favor, button two if you wish to vote against, or button three if you wish to withhold your vote.
If you make a mistake or change your mind, just highlight the resolution you wish to vote on and press the correct button number on the handset before voting closes. There is also an option available on the menu for you to cast all your votes in accordance with the board's recommendations if you would find that more convenient. If you previously returned a proxy form but were given a keypad and smart card at registration, you may vote now using the keypad and your proxy form will be disregarded. As I mentioned earlier, voting will remain open for the duration of the question and answer. I will give you due warning when voting is about to close after we have taken your questions. Again, please refer to the instructions in the welcome letter if anything is unclear.
In accordance with the company's articles of association, I give formal notice that I demand a poll on each of the resolutions numbered one to 17 as set out in the 2019 AGM notice. Voting is now open. This brings us onto your questions. If you have a question on any of the resolutions, please raise your yellow voting card and wait for a microphone to be brought to you. Before asking your question, can I ask you please to state your name and confirm that you are a shareholder or give the name of the shareholder you represent. In the interest of allowing as many shareholders as possible to participate, I would be grateful if you could please limit yourselves to one question and to keep it as brief as possible and to the point.
If you have a question that is specific to an individual customer relationship, please speak to one of our dedicated customer representatives in hall three after the meeting. They are there to help you. As a reminder, voting is now open and will remain open until the end of the questions. Does anyone have any questions? Okay, maybe we take a couple. Maybe we can take one and two, the questions nearest to you first, please.
[Nesar Rafiq], a Shareholder. I've got two questions. I know you're limiting it to one, I want to try and put my questions into perspective. The question I want to ask is, the face of capitalism has got to change. You as being the largest bank in Europe can lead that change. That change for me goes in three or four areas. I read the report, I want to ask what you feel will come first. Will profit come first or moral obligation sometimes? There's the staffing issues with pensions and the pay. There's this investing in companies which are participating in human rights abuses. There's climate change companies and investing in that. Fourthly, having a policy or introducing a policy where so much of the profit goes into doing social good for the world.
Because as a shareholder and other people are not going to be told that this is the way things will be done, because people blame the bankers for the past 10 years' mistakes. On all those issues, how is the bank going to deal with that type of issues now and future?
Okay. Thank you. Let's take the second question as well, we'll come back to answer. Thank you.
Mr. Chairman, I'm here today as a shareholder, also to represent the concerns of thousands of Christian Aid supporters in churches up and down the U.K. Earlier, John Flint mentioned that HSBC was committed to financing the low-carbon transition, which obviously we welcome. Yet recent evidence indicates that the bank is still a net contributor to climate change. According to the respected Banking on Climate Change report published in March of this year, HSBC has provided $19 billion worth of finance to new fossil fuel projects. Since the Paris Agreement on Climate was signed in 2015, then $58 billion in total, to fossil fuels. We're also concerned that according to other evidence, HSBC is still a leading European financer of coal power companies.
The IPCC report of October 2018 synthesizing the research of over 600 scientists, plus previous IPCC reports from the past five years have proved that to keep global temperature rise to below 1.5 degrees or even well below two degrees and avoid catastrophic climate change, the expansion of the fossil fuel industry must be brought to an immediate stop. Why is HSBC still investing in new fossil fuel projects? I want to speak from the heart for a minute. Christian Aid works with communities who have lost family members, homes, everything, to climate-related incidents. Typhoons in the Philippines, floods in Bangladesh, droughts in Kenya.
I wonder what the board has to say to these communities about its expansion of finance to fossil fuels and when will HSBC publish a plan for phasing out the finance of fossil fuels altogether with a clear timeframe that is in line with the Paris Agreement which HSBC supports and the latest science from the IPCC report. Thank you.
Thank you for your question, and thank you for both questions. What I'd like to do is deal with the first question, talk to the first question and ask John, I think to give you much more specific information and background about the sustainability and the climate issues. That takes part of question one. You sort of wait for the end of that. I think all of the points you raised, profit versus moral obligation, human rights abuses, climate, and social good are all things that stay very focused in our agenda and our thinking. We realize that not only we have obligations to shareholders, but we have significant obligations to the communities in which we work, the communities in which we operate, and have done so for many years.
I think if you ask those communities, by and large, almost without exception, they will say to you that we understand our social role. We have been a contributor to all of those different elements, and we think about it actively. I think the ESG report, which was published just a few days ago, I don't know whether you had an opportunity to look at that, but I think that again, really sets out clearly how we think, what we've done, and what we believe. The points you raise are, again, fair points, and there's no right or wrong answer, but we've thought about these. We think constantly about these, and we will continue to think constantly. John, perhaps you talk about sustainability, et cetera.
Sure, Mark. Thank you. Mr. Rafiq, thank you for the question. Just I'll echo everything Mark said. If you haven't read the ESG report yet, it's very recently published, but it does attempt actually to deal with exactly the question that you ask. The spirit of the question that you ask is something that I agree with. I think we do have to make a better job of making these trade-offs and explaining how we make the trade-offs. We're 154 years old, and we'd like to think that we've got a long period in front of us to serve people, and we'll only be able to do that if we get these trade-offs right. Perhaps if you've got time at the end of this, we can have a chat through the ESG report.
With respect to the challenge around climate change and the transition to a low-carbon economy, again, I'm glad that this has been raised in this forum. I think we believe that we have a leading role to play in that transition. We have global stewardship responsibilities, I think, to play a part in that solution. Where I think we don't agree with you is the suggestion that we need to bring an immediate end to the financing of all fossil fuels. I think most climate scientists, and even the Paris Agreement, don't anticipate, don't require, don't suggest that we need to stop financing all fossil fuels today. We haven't yet reached what we believe is going to be the peak carbon consumption for the planet. What we have to do is play a meaningful role in that transition.
Most of the debate to date has focused around coal-fired power, and we've got quite a clear and explicit policy around how much appetite we have to participate in the financing of coal-fired power generation. I think it would be wrong at this point to suggest, or even for us to begin to commit to a total ban on financing for fossil fuels because the world has other sustainable development goals that it needs to meet. We haven't yet got to what we think is the peak consumption of carbon. That's ahead of us, and then we have to plan for the transition. HSBC is committed to playing its role. As you know, we committed a while ago to deliver $100 billion of financing towards sustainable financing. We've delivered $28.5 billion already.
We've made commitments to our own energy consumption and making sure that our energy consumption is all renewable by 2030. We're not there yet, but we've got a way to go. Yeah, the spirit of the question we agree with. The way that we affect the transition, I think we have a slight difference of opinion. Thank you for raising that.
I think we have had some dialogue with Christian Aid, and we're very happy to continue that. Maybe we go to, let's do it in number four and five next. Okay, maybe five and six.
Good morning. My name is [Munira Chowdhury], And I am a proxy holder for Mr. Alan Williams. HSBC and a consortium of banks are financing massive dredging of the Payra deep seaport in Bangladesh to make way for, among other things, a coal terminal. This terminal will have an enormous annual capacity of 40 million tons of coal. According to the Port Authority, this coal will supply eight coal-fired power plants. The dredging for Payra port is highly controversial. According to Dr. Hermann Kudrass, a scientific advisor at the University of Bremen with a background in Bangladesh marine geology, dredging and maintenance costs for the channel would be, "extremely costly, difficult, or even impossible due to high sedimentation and cyclone-prone inundations." Locals have reported hardships and corruption in retrieving compensation for the land they lost due to the construction of the port.
HSBC's annual policy is opening up the floodgates for pollution that Bangladesh has never experienced before. The outcry from local groups in Bangladesh, Vietnam, and Indonesia is clear from this full-page ad on page 19 in today's Financial Times newspaper. Given the significant damage that would result from the burning of coal imported through the expanded Payra port, including damage to Bangladesh and the world's environment, as well as to the livelihoods of locals who would suffer devastating impacts of air pollution, when will HSBC withdraw its involvement in the Payra dredging project?
Okay. Thank you for that. We'll take your question. If we could just wait for question six, and then we'll come back. Thank you.
Just stand up a bit. Can you hear me? Well, thank you for the invite to the shareholders' AGM. I will report my interest is in favor of Resolution 17, pension clawback. I really want to appeal to all the shareholders who may have already thought they'd follow the board's directive to just vote for everything the board said, and just step back one little moment and listen to me for a couple of seconds before I actually ask my question of the board.
If you step back 46 years ago when this policy came in for clawback, you can imagine a board pretty well made up of the same mixture, but it would have been all men, gray-haired, long year service, deciding what a good policy it would be to change the pension scheme and come up with a calculation that in their wildest dreams today, nobody ever would put forward as equitable. It is not equitable to say that the lowest paidThe longest serving staff should have the biggest proportion of their pension taken away from them when they get to pension age. I just step back again to 1974. When the banks used to advertise for staff in recruitment campaigns, it was very often that girls were put into the typist pool and boys were given fast track training to become bank managers.
Here we see today on the board, probably some people here who have benefited from being in a male-dominated area and being pushed up the ladder, whilst women were told that they could give up their pension rights for marriage gratuities, and, "Don't worry your silly little head about pensions, because let's face it, you're going to get married, you're going to have children. You're going to have somebody who's going to have a pension. It does not matter to you. You don't need to even understand the financial implications of what state deduction is." Let me come to state deduction. Everybody I know, and I've asked a lot of intelligent people, what do they think state deduction means? They think it is a deduction from the state pension.
Well, unfortunately, we've had a triple whammy being female, because for a start off, we were contracted out with SERPS. Yes, for a lower national insurance payment, but HSBC benefited better because they also had lower national insurance payments. We get to state pension age, and we have a lower state pension. We've got the gender pay gap. Well, everybody knows, because HSBC has admitted it, that women were likely to be paid 30% less than their male counterparts, again, in an area where males were pushed up the career ladder faster than women. That's going to have a direct impact on the pension pot, the value of it. Again, another deduction hidden for women.
The third one, which is the real worst one, is the HSBC clawback, because when I say that women who have picked up GBP 7,500 per annum, and that is not a lot, are being taken then for working 40 years, GBP 2,500 off that amount, that is disgusting. That is the third and final triple whammy for women. My question here is to the board, because I noticed when I looked on the share dealings for last month, and it will be John Flint and Marc Moses, particularly Marc Moses, my bottom jaw drops because they trade in nearly GBP 2 million in shares from their personal wealth of HSBC. This is money that the women will dream of never having.
My question is, when the board said, "We are comfortable in saying vote against Resolution 17," were they really so comfortable when they went to their share portfolio of GBP 20 million + shares and took a little bit out for their piggy bank to keep them going this year, that they are pushing a lot of HSBC ex-staff, loyal, hardworking staff, into further poverty? The pension fund can afford to put this right. If we made mistakes years ago, we put them right today. We don't go, "Oh, it was made by somebody else." Come on, board, take some human sense in this. Please, shareholders, please do not just directly vote with the board on their recommendation.
Please take a moment to look at the arguments put forward and have a look at the history of women and pensions, and please do something for the women in this world that have helped this country along. Thank you.
Thank you for the question, again, a number of elements we'll come back if we can answer the first question first. I think I'll ask John to talk in detail about the particular exceptions we make to Bangladesh, Indonesia, and Vietnam. I can tell you personally, I've spent a good amount of time in Bangladesh, and it is, as you say, a beautiful country, and we'll do everything we can to preserve that beauty. John.
Mark, thank you. Thank you very much for the question. I'm not familiar with the dredging operation or the financing of that, so I won't speak to you in detail about that. I think the question speaks really to the energy policy that sits behind that. In our energy policy, you will recall that we have made exceptions to allow us to continue, possibly, to finance new coal-fired power in three countries, of which Bangladesh is one. We made that carve-out very deliberately because these are three countries where we have the privilege of being a full-scale universal bank. We serve these wonderful economies, and at present, significant parts of the population don't have access to electricity. At present, it's reasonably clear there isn't a viable alternative to coal.
We feel, given that we have a network of 66 countries, it's most important to us that this transition to a low carbon economy is an inclusive transition. It's too easy to sit in London or Birmingham and say to people in low and middle income countries, "You can't have what we have." I know the transition is complicated because the world has a problem that it needs to solve, we just felt as HSBC, the right thing to do was to allow a short window for these three specific countries to finance and to develop new coal-fired power. We also recognize that coal is probably the first fossil fuel that does need to come out of the energy picture if we're to affect the transition.
We've been quite clear in this carve-out that in order for us to finance, we will need independent advice that there is no credible alternative in Bangladesh to coal. Any new development will have to be done in the context of the highest possible technology standards. Since we announced this policy a year ago, worth noting we haven't financed any new coal-fired power, I think given that the way technology's moving, as each month passes, the probability that we will probably fall. I think the carve-out is important to us. This transition must be inclusive. We have a privilege to serve these countries, it's not for us to tell them that their people can't have electricity. Thank you.
Thank you. I think that's just in time. I think we will move on back to the previous question.
Sorry.
Can we come back? I'm going to come back at the end if we need to, if we have time, please. If I can come to talk about the state deduction and the clawback campaign. I think as you know, we've thought long and hard about this. We've debated it both at the executive level and the management level. We know this is a very important issue. We don't take it lightly for one second. We know that many of the people devoted significant parts of their working lives to Midland, and then to HSBC, and we are grateful for that. In coming to our decision also, we listened very carefully to the points raised by the campaign group. We, again, saw many MPs on behalf of their constituents. We've sought a number of elements of legal advice.
We have in the group, current and former employees, over 300,000 people that we provide benefits to. That includes 190,000 of the U.K. pension schemes. A large proportion, a majority proportion, are defined contribution members, not defined benefit members. We have to be fair to all of these current and former employees, and not just to those who benefit if the state deduction ceased. I think it's worth noting a couple of points, that the post-1974 section members are provided with a guaranteed income in retirement, and it's amongst the most generous of the pension schemes right across the group. The large majority of our current employees, as I said, are members of pension plans that won't deliver a guaranteed income in retirement. As you said, we agree, the state deduction does impact lower-earning employees, many of whom are female.
It is not discriminatory in nature, we stated clearly in the written response in the notice of the AGM, there are a number of factors that impact the size of the deduction as a percentage of the member's total pension. You have issues like commutation, you have issues of early retirement, which make more complex. We've set out clearly, as clearly as we can, in appendix four of the notice of the AGM, the shareholder resolutions, our position. We're happy to continue to talk further, as you say, everybody has an opportunity to vote. You began by saying it was a board directive. It's not a board directive, it's a board recommendation to shareholders to vote, shareholders must clearly take their own views.
We believe that the policy that we've set is in the best interest of shareholders, the best interest of equality and fairness across our cohorts of pensioners across the world, benefiting one at the cost of another is not the right thing to do.
Okay, can we take the next question, please? Maybe number eight and number seven, please.
Are you with me or not? [Charles Stroud]. Small shareholder. Shares in nominee account. I'm the beneficiary. Why have we got the yellow poll cards if we've got machines? These yellow poll cards, why have we got them if we've got machines? We've got voting slips down the middle.
Very funny. Just use the machines are the final, so just use the machines.
Thank you.
Am I on? My name is [Paul Robson]. I'm a proxy voter for Sybil Cock. I have been to Brazil, and I have studied the impact of the collapse of two mining tailings dams in the last four years under the ownership of Vale, and the devastating impacts that the catastrophic collapse of these tailings dams has had in the areas in the river basins where these mining disasters have occurred. HSBC is an investor in the mining sector. It is an investor in Vale. What these two events in Brazil demonstrate is, first of all, that the collapse of these mining waste dams does have a catastrophic effect, which possibly cannot ever be remediated. Secondly, it indicates that there's a great deal of unquantified risk in the mining industry, and particularly in the way that it disposes of waste, and particularly in these kinds of mining's tailings dams.
It is far from clear that there is really an independent system to quantify this risk. It is something which investors in the mining sector really ought to be concerned about, because we don't know how much risk there is in this area. What my question is as HSBC, as an investor in the mining sector, and particularly as an investor in Vale, what it is doing to ensure that the mining sector, and particularly this company in Brazil, does have an independent system to quantify the risks of mining waste disposal, and whether it actually has, on behalf of investors and its shareholders and the companies, whether it actually has financial reserves which are sufficient to cover the decommissioning and recuperation and repair to these mining waste dams, and to provide compensation and remediation if there are further disasters. Thank you.
Thank you for your question, and maybe I can take it at a high level and give John to give the detail. I think, first of all, clearly we are deeply sad at the two tragedies in Brazil and those people that lost lives. In terms of the support of this was including the iron ore sector, not on the carbon side. I think the basis, and maybe John can talk a little bit about how we think on the mining side and again, particularly on the waste disposal, whether we have the systems in place to be able to assess, as you say.
Mark, thank you. Thank you for the question. I'll just add my sympathies to those expressed by Mark. I mean, it's a terrible tragedy. I don't want to speak about Vale as an individual customer, because you know we have a policy of not doing that. I do think attitudes towards this kind of industrial accident are shifting. We're going to have to update our risk management frameworks as well to ensure that we're keeping abreast of the risks that are inherent here. You described us as an investor in the mining sector. I think primarily we're a lender to them. That does mean we're deploying capital here that's at risk. We will have to refresh our thinking around this, I think in line with both the mining industry and our sector as the providers of capital.
I don't have anything specific to commit to today. I think that's probably something that we'll be updating you on later in the year.
I can take maybe one at the front here. We can take maybe one at a time, please.
Good afternoon, Mark and John. I've made a special visit. Normally, I'm a regular at the London venues and probably sing the same tune, nothing's happening. Basically, last year, I raised a question on travel insurance. Somebody mentioned besides me that people are living longer than 70, the banks will look at it. Well, nothing has happened. It's over the years, absolutely nothing. I mentioned another bank at the same time, but that's not an issue now at the moment. Overcharges for travel insurance are very expensive when you want to extend over 31 days. Can anyone say Nationwide probably are very reasonable. I think we should look at if somebody wants to extend who are retired and want to travel abroad more than 31 days, it stops us going in terms of price. Price is crazy. HSBC, ridiculous.
You might as well get a yearly travel insurance for the price they're charging for extension. If you can, I think it's been going on years, they mentioned that we will pass to a resolution team, nothing has happened. Same thing, I think, I mean, prior to your arrival here, I raised this issue. We should look at comparison with other banks. With small charges, you have more on their travel or premier customer services, four or five different item, NatWest, Lloyds, Barclays. I will speak to somebody after the meeting. If they can speak to me, I'll be grateful. One suggestion for the bank, I think M&S, which is a subsidiary, have started one-time password. In India, it's been going for years. It will really help the bank, I think we should progress.
I think they say it's on progress, really should move up so that it does help. One-time password in India has been going for the last three years. Anywhere you go, it will help the security. My wife had a note from the Marks & Spencer Bank, I straight away rang the call center. I said, "What's happening?" "Oh, we're looking at it. It will come." It's still Please, thank you.
Again, thank you for the question. We do have representatives here, and I promise you, we won't ask the same question next year. You may not like the answer, but we will definitely answer the question. Thank you.
Thanks very much. I'm Ryvka Barnard, a shareholder, and I'm here on behalf of War on Want. In December of this past year, HSBC announced that it had fully divested from Elbit Systems, which is an Israeli arms company that's been involved in the production of white phosphorus and artillery systems that are compatible with cluster munitions. Of course, that's contrary to international treaties and also contrary to HSBC's own policies. For years, HSBC had been invested in Elbit Systems, so it had gone under the radar of HSBC's monitoring system. My question has to do with what the bank is doing to look at its monitoring system, and can the bank give assurances that it's not still doing business with other companies that are producing cluster munitions?
Thank you. Let me set the context here. I think you know we operate in 66 countries and territories across many different culture divides, et cetera. We're not a political organization. Our purpose is to help our customers and employees. Our purpose is around supporting economic growth and development of financial markets as responsible long-term investors. Really to help our employees make judgments in an increasingly complex world, what we've done is set out both values and sector-based specific policies. With regard to Elbit, our decision to divest from Elbit was based on our longstanding defense policy. We do not invest in companies linked to the use, stockpiling, production, and transfer of cluster munitions. Our decision was not the result of any campaigning by War on Want or BDS, and is not indicative of support for either of those movements.
This was a decision taken for exactly the point that you made, the monitoring that we have of this, that the boundaries that we put in both terms of value and sector-specific policies prevent us from doing it, and that the systems are currently in place and demonstrated by this example are working well.
You only knew about it because we brought it to your attention.
I want to add.
Okay.
to the people who suffered because of that investment. There was real people died, and that's what I call blood money, sir. Blood money should not be blood money, it should be proper. Any company has got the moral obligation to say, we will not invest in anybody that kills anything or anybody. Money is not the answer in the world. Love is answer, and that will stop wars. As shareholders, we will hold you to account. If it ever happens again, we will demand your resignation, sir. Anybody on the board. You've got responsibility. It could be your child killed.
Thank you.
We all have to sleep with this. I'm sorry I'm passionate, when it comes to banks investing in a place and in the wrong, you must apologize. Don't say, "Please don't invest.
Sir, you've had your opportunity. Please, could we just pass on to the next question?
You have to treat people with respect and consult us by saying, "We will listen." If you made a mistake, be brave enough and said, "We as a bank failed those people who died as a result of that." Banking is not-
Sir, I'm going to have to ask you to stop.
Okay.
Thank you. If we could take maybe six, please.
Thank you. [Mary Wilkins], proxy for Sybil Cock. HSBC has been a key target of a national Stop Arming Israel campaign because of its business dealings with companies selling weapons and military technology to Israel. This is used in violence, which is currently being investigated by the International Criminal Court. On this basis, HSBC local branches are being picketed regularly in dozens of locations around the U.K., a campaign which has been growing each month. My question is, what steps are the board taking to mitigate this reputational risk?
Thank you. Effectively, my answer to that question is exactly the same answer I've given to the question a second ago. The way that we have set this up internally is to, in an environment, in a world that's increasingly complex, we have both sector and value-based policies that are set out, and our teams, through the banking business, through the investment business, are making decisions on that basis. That enables us to have taken the decisions that we've taken. As we said, we will not take political positions, and we will not invest in companies linked to the use, stockpiling, production, and transfer of cluster munitions. Thank you. Can we get a question, the one, this lady.
I'm [Sybil Cock], and I'm a shareholder. HSBC has been named and shamed over its complicity in human rights violations in Palestine. HSBC has also been flagged, as we've heard, as a laggard in implementing effective due diligence processes. What has the bank done to ensure it is not linked to breaches of human rights and international law in Palestine?
Again, thank you for the question. The answer is the same as the previous questions. I've nothing to add. Can we have the next question, please? Maybe just as we go to number five, please go ahead. I think just to remind you that voting is open. You can vote at any time during this Q&A through your machines. Again, I'll inform you before we close all voting. Voting remains open now. Please.
My name is Councilor Glenn Caron. I'm here representing the Local Authority Pension Fund Forum, an association of 80 local government pension schemes and six pools with assets under management of around GBP 230 billion. A majority of our LGPS funds hold HSBC shares. Given that HSBC is one of the worst gender pay gaps in the U.K. banking system, what steps are you taking to address the widening of the gender pay gap in HSBC?
I think with regard to gender pay gap, I think you look at it in terms of, again, from the employee side, I think John is the best person to be able to answer that.
Mark, thank you. Thank you for the question because this is a really important issue. Just to remind everybody, the gender pay gap is not a reflection of a pay equality issue at the moment. It is not the case that women get paid less for doing the same work as men. That is not the issue. The issue fundamentally is the pyramid. We do not have enough senior women in HSBC. We are making progress. In 2012, our senior management population was 22% female. At the end of last year, we had improved that to 28.2%, and we have got a public commitment to get to 30% by the end of next year, and we are on track for that.
When we get there, we will set a new target because 30% is not good enough either. I think you can feel good. We should all feel encouraged by the progress we are making.
We have got more work to do. That over time will correct the gender pay gap. There are a couple of structural issues that relate to HSBC, which make our numbers look as bad as they are. We have our wholesale banking business, which is headquartered in London, the hub of which is in London. That is still a very male-dominated industry, changing slowly as well. That skews our numbers. The group's head office is in London, which is, to my earlier point, still predominantly male, improving over time. That explains why our numbers actually are outliers, even in the context of our industry. The way to deal with this is to get more women into senior positions in banking. We are making good progress. Thank you.
I think also on the non-executive side, I think as you can see, the Hampton-Alexander Review recommended board diversity of 33% female by 2020. At the present time, at the end of 2018, our five female directors on the board represented over 36%. Again, we are not looking to just accept targets. In this area, we are looking to exceed them. Next question, please. Can we go to number eight, please?
I am here to ask clarification from the board on the HSBC business' current relationship with Caterpillar, in which it holds shares. Is the board aware that the bulldozers and other machinery manufactured by Caterpillar are used in illegal activities, including the destruction of Palestinian homes, the construction of illegal settlements in the West Bank, and the illegal apartheid wall on Palestinian land? These are considered war crimes under international law. Last October, the prosecutor of the International Criminal Court made a public statement saying she is watching the issue of house demolitions closely. Has the HSBC challenged Caterpillar on its involvement in war crimes?
Thank you for the question. I think, again, HSBC does not take positions on political issues. We take and we strongly support observance of international human rights principles as they apply to business.
I'm sorry, you are going to.
No, sir. Please. We're answering the question you've asked you to. Please.
You've got to take a position on war crime. I'm sorry, sir. You are damaging reputation of this company, and I shall be moving a resolution to carry on passing. Sir, just say.
No, please, I'm answering the question.
You're not. Why did you say you made a mistake? I'm sorry, sir.
We examine all of the companies that we operate in, that we invest in, and we support across a whole bunch of different criteria. Again, I'm not familiar with the depth of the Caterpillar side. I don't know whether John, again, neither of us can We will go back and look again. Look at this and come back if there is an issue. I'm sorry, I don't have enough information at this point to be able to answer the question in any depth. Thank you.
Can I be speaking?
Please, number four.
Good morning, sir. My name is Sager. I'm a shareholder. I'm also, with a colleague, a shareholder, Mr. Hinchcliffe. We wrote to you three times over the last four months. So far, we've had no response from you. I wonder why that is, sir. It was addressed to you personally.
If that's the case, I apologize. It's unacceptable. We will look into If we give, again, your name to the representatives around afterwards, I will personally look into it to make sure that.
If you're in the hall at lunchtime, sir, I'd like to have a word with you personally, if I may.
You may.
Thank you very much.
Let me get to number seven, please.
Thank you. I'd like to speak about Resolution 17, Mr. Chairman. My name is [Nancy Ball]. I'm a shareholder, pensioner, and committee member of the Midland Clawback Campaign. The senior executives and the trustees of our pension scheme are failing monumentally to shoulder any responsibility for the confusion and the resulting chaos that surrounds the Midland section of the scheme. Collectively, you have laid the blame on the scheme members and your current staff for the misunderstanding, refusing to accept that you may also be culpable. You state the clawback is not disproportionate. You are wrong. A senior manager retiring with a pension of GBP 50,000 on the 30th of June, 2015, after 40 years' pensionable service, will lose GBP 2,514 from their occupational pension on reaching state pension age, which is a loss of 5%.
A cashier retiring with a pension of 10,000 on the same date and with the same number of pensionable years will lose the same amount of 2,514, which is a loss of 25%. This is disproportionate by a factor of five. The administrators, Willis Towers Watson, fare no better. One lady that I happen to know has received a letter from WTW to say that they have overpaid her pension since she attained state pension age. They went on to say that they should have been making the state deduction of GBP 95 a month. Initially, they said that she owed clawback of GBP 8,068, then they changed their minds and said it was GBP 8,300. Then they said that they would let her off with the extra and stick with the GBP 8,068.
She, like the rest of us, never knew that her pension should have been reduced, and if she had, I have no doubt that she would have advised the administrators of their error. This is a lady with integrity. The proposed clawback per month will be GBP 169, leaving just GBP 375 per month of her occupational pension. If this lady walked into a branch of HSBC today, she would be recognized as a PVC, a potential vulnerable customer, for two reasons. Firstly, she's 69 years old, and secondly, she was recently bereaved. On hearing this, Clive Betts, MP, said, and I quote, "These individuals said that they didn't know about the scheme, and HSBC said that it is perfectly obvious. So obvious, they didn't even know about it themselves, in this case." You state that to remove clawback would be a cost to the company of GBP 450 million.
You offer no explanation as how do you arrive at this figure. Our pension pot is in surplus as at March 2018 to the tune of GBP 2.6 billion. That is GBP 2,600 million. The Midland section of the defined benefit scheme has 52,000 members, which is 25% of the current HSBC pensioner population. Clawback at present subsidizes the other 75% who are unaffected by clawback, and it saves the company money. 25% of the above stated surplus is GBP 650 million. This money effectively belongs to the DBS pensioners, you know you can afford to cancel clawback, state deduction, downward adjustment, I think that's a term that you used recently, Mr. Tucker. Whatever you wish to call it, sadly, you don't choose to. To put the cost into some perspective, HSBC have paid fines and compensation since the year 2000 of $5.78 billion.
Use an exchange rate of $1.30 to the pound, this equates to GBP 4,446 million. An annual average cost to the bank of GBP 234 million. You've made a grave error of judgment and have massively underestimated the upset and distress your indifferent response to our concerns has caused. At the same time, you've strengthened our resolve to make sure that the truth will out. We have worked with MPs and formed an all-party parliamentary group. The cross-party MPs have expressed their disquiet and outrage regarding clawback. I wrote to the Equality and Human Rights Commission, I know that they have written to the bank and await a substantive response. They have been waiting for some time now for an answer, I do wonder what is causing the delay. We have gained the support of Unite.
Is that the question? Sorry.
I have a question. I'm coming to it. We've raised the support of Unite. We've appointed our own solicitor and barrister, paid for with the funds raised by the campaigners. The media are taking a great interest in the financial distress the pensioners of this wealthy bank suffer. I would like to kindly ask the shareholders to come to their own decision regarding clawback, and hopefully you will support us today and vote in favor for Resolution 17. Just two questions, Mr. Chairman. In your elitist world, do you have any concept of the misery that this archaic pension clawback is having on your HSBC family? Can it be right that the administrators are chasing a vulnerable pensioner for thousands of pounds worth of debt, a debt that has been created by their own maladministration? Thank you.
Thank you for your questions. With regard to the pension overpayment, for this we apologize. There was an operational error by the pension scheme administrator, which unfortunately meant that 47 members, 47 out of 52,000, received an overpayment of their pension. The trustee, as you're aware, contacted the affected individuals in early 2018 and proposed repayment plans to be able to reclaim the overpayment, and in most cases, the amounts have been repaid or a plan for repayment has been agreed. The trustee has extended all sorts of flexibility in the repayment period to reduce the financial impact. It's a mistake made by pension scheme administrators. We apologize.
The trustee effectively has an obligation to pay benefits in line with the scheme rules and a duty to take action when that's not the case, and this was clearly not the case. With regard to your overall point and whether we are comfortable, we've done enormous amount of work. We've had these conversations internally. We've gone out externally. We've checked communication. We've checked with legal advisors on all of this, external legal advisors. We are comfortable that we are making the recommendation that we made, which, as you say, shareholders will vote on, the recommendation to vote against Resolution 17. Next question, please. Let me go to Steve.
[Justin Cox], a proxy holder from two brokers and a beneficial owner. My question builds on the stated goal of bringing HSBC to more customers. I'm a conservative millennial, which is becoming a little bit of rarity these days, who believes in the power of capitalism to lift people from poverty, provide individuals more opportunities, the ability to lead better lives, and the ability to help others. I'm concerned with decisions of certain banks like JP Morgan, where the media's reported they have chosen to end relationships based apparently solely on the customer's conservative politics. This has alienated many of their customer base. Can the bank commit to not discriminating solely on the basis of conservative or liberal personal viewpoints? Finally, I want to thank, pertaining to the resolution, Irene Lee. I think she's a wonderful director, has a great staff, is easily contactable. I'm definitely voting for her.
Lauren Wolfson's wonderful within the bank, Ben Mathews, Lauren Klug, Nila Cheredia, Director of Security, and we really, as shareholders, appreciate the wonderful service that these outstanding professionals provide to the bank. Thank you.
Thank you for, again, the mention of the directors and the service you're getting. I don't want to make policy for the bank as we speak, John, I think we would both be fairly comfortable with anything that's of a non-discriminating nature. We have no intention of discriminating against anybody or anything.
Agree.
Sorry. Okay. Do we have maybe number five, please? Behind you. No. Not necessarily.
Hello. Thank you, Mr. Chairman. My name's [Peter Moldy]. I'm an ex-employee, pensioner, premier customer, and a shareholder. Just quickly, I'd just like to reinforce and support the comments made in the clawback, which I've also suffered from. I think everyone said their piece, I'll say nothing on that. My question just now is actually about one of the resolutions, which is probably a first for this one. It's resolution number 15 regarding a scrip dividend. Ben, I've got a note that's signed by you, talking about the scrip dividend, that we may elect to receive a scrip dividend. I have ISAs, as does my wife, we can't get scrip dividends on the ISAs. An ISA is a savings scheme. I don't want the cash. I realize other people might want the cash. I don't want the cash.
I have to take the cash, InvestDirect can't give me a suitable explanation about why I can't take the scrip. I'd like to take the scrip and carry on investing in the company, I have to then go and buy it, pay the stamp duty, pay the fees, which I think is wrong. All I want is one button on the InvestDirect account I can press and say, "Convert to scrip." Can we do that? If not, can you change the overall comments for next year's annual report?
It sounds a perfectly reasonable thing to do. Let us get the experts to come and talk to you, get the details, if there's an issue that we can support that makes sense, and what you say makes sense, then I think we would be happy to help. I think we've got time for one more, one last question. Maybe we take in the middle here, please. Number one.
Hello. Yeah. My name's Sam, and I'm attending on behalf of ShareAction. Last month, as I'm sure you know, major HSBC shareholders, including your 10th largest shareholder, representing over $1 trillion in assets, sent a letter that asked the bank to commit to taking stronger action on coal. Essential ask of the letter was for HSBC to institute a corporate finance policy that excludes loans and underwriting services to companies that are heavily reliant on coal. As recognized by HSBC's peers such as ING, BBVA, Santander, and UBS, that have substantially restricted finance for coal-reliant companies, the coal sector represents a real financial risk. In fact, as pointed out by your own shareholders in the letter, early closures of power plants in the coal sector will lead to losses of up to $8.3 trillion. With the cost of solar and wind plummeting, this future fast approaches.
If HSBC continues to finance coal companies, it is not only exposing its shareholders to financial risks, it is accelerating the growth of the most polluting fossil industry in the economy. This not only has huge health implications for communities in industrializing countries, with coal expected to cause 70,000 premature deaths in Southeast Asia alone, but is leading to a runaway climate crisis that will displace the poorest on our planet. The coal for development narrative does not hold water. I'd like to say in response to what you said earlier, John, we haven't reached peak carbon consumption yet, but the International Energy Agency has found that our current stock of carbon-intensive infrastructure will bring us to that point, i.e., there is no room for expansion.
To protect the interests of the bank shareholders and the safety of our planet, we are asking HSBC to commit to a prohibition of general corporate financing, underwriting, and advisory services to companies that are highly dependent on coal mining or coal power, and as such, are unlikely to transition in the timescales needed. Will you commit to this today?
Sam, thank you for the question. I don't want to repeat what I said earlier on. I agree with most of what you said, actually. The role of coal, it will be the first fossil fuel that needs to come out of the equation if we're going to meet our obligations as a planet anyway, at least. The route by which we get there is where we will disagree. The policy that we've got now really focuses on coal-fired power. In the developed world, by the end of this year, we won't be involved in coal-fired power financing anymore, and we've got that small exception for three low and middle-income countries that goes out only to 2023. Your question is broadening this out into not just power generation, but the other parts of the coal supply chain. That's something I'll take away and have a look-
Continue your corporate finance policy.
Yeah. No, I understand. Correct. We'll take that away and have a look at it. I'm not going to commit to anything today without doing the research. I appreciate the spirit of the question, and I'm grateful to you for raising it.
Okay. I think I'm not going to take any more questions. We're happy, John and I and the directors will be happy to see anybody outside or during the lunch break, and we're happy to continue the conversations then. What I'd like to do so at this point is just check that everybody's voted or has had time to vote. Let me give another 10, 15, 20 seconds for anybody that wants to vote or change to be able to do that in light of what they've heard this morning. Okay. I plan to close the voting in the next 10 seconds. Okay. Let me close the voting. Ladies and gentlemen, thank you for that. The detailed results, which verified by our registrar and reflecting all votes cast, will be announced to the London Stock Exchange and published later today on the HSBC website.
As you'll see behind me on the screen, I can confirm now that resolutions one to eight, 11, 13, and 15 have passed as ordinary resolutions. Resolutions nine, 10, 12, 14, and 16 have passed as special resolutions. In line with the board's recommendation, resolution 17 has not passed. Ladies and gentlemen, that concludes our formal business. I would like to thank our directors for their invaluable contributions to HSBC and all of my colleagues for their tireless efforts. I would also like to thank you for your presence today, to coming for Birmingham, your engagement, and your support of HSBC. There are lunch bags available in hall three where my fellow directors and I, as I've said, will be happy to continue our discussions. Lastly, please could you leave your voting handsets on your seat when you leave the auditorium. Many thanks again for coming today. Thank you.