HSBC is facing more questions over its public support of a controversial national security law for Hong Kong.
Federated Hermes is the latest organisation to raise concerns about HSBC’s backing of the legislation after Aviva Investors publicly rebuked the London-based lender and its rival Standard Chartered earlier this month over the new law.
The asset manager, which has a long history of focusing on environmental, social and governance (ESG) issues, said it was “engaging” with HSBC to “fully understand” the bank’s position as part of its EOS stewardship service, which acts on behalf of institutional investors. Federated Hermes has £859 billion (US$1.06 trillion) in assets under advice globally.
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“We have questions on the bank’s statement amid concerns that the new law may have an adverse impact on human rights in Hong Kong,” Roland Bosch, the lead engager for financial services EOS at Federated Hermes, said in a statement. “We expect companies to support improvements in protections for citizens and not back their removal.”
Federated Hermes previously told the South China Morning Post that it actively screens for allegations of human rights violations as part of its investment process.
Bosch’s comments were first published in the British tabloid The Mail on Sunday and shared with the Post on Monday.
A HSBC spokeswoman declined to comment on Monday.
The National People’s Congress (NPC), China’s top legislature, said in May that it would draft a national security law for Hong Kong following months of pro-democracy street protests, prompting concerns the legislation could be used to restrict speech and assembly in the city.
The legislation is designed to prevent, stop and punish acts of secession, subversion, terrorism and collusion with foreign forces to endanger national security and is expected to be passed imminently by the NPC’s standing committee. It is expected to carry a maximum penalty of life in prison.
It sparked an outcry by Western governments, with the US imposing visa restrictions on Chinese officials over the law and China threatening to retaliate with its own restrictions on US individuals who “behave egregiously” in relation to Hong Kong affairs.
Mainland media and Hong Kong’s former leader, Leung Chun-ying, blasted HSBC after it did not immediately come out in support of the law when it was revealed in late May. HSBC is based in London, but generates most of its profit in Hong Kong and Asia.
On June 3, the bank posted a photo to one of its social media accounts in the mainland of Peter Wong Tung-shun, its Asia-Pacific chief executive and a member of the Hong Kong delegation of the Chinese People’s Political Consultative Conference, signing a petition organised by a Beijing-loyalist group supporting the law.
“As a member of Hong Kong Association of Banks (HKAB), consistent with the statement issued on 26 May by HKAB, we reiterate that we respect and support laws and regulations that will enable Hong Kong to recover and rebuild the economy and, at the same time, maintain the principle of ‘one country two systems,’” the bank said in the social media post. “We are fully committed to playing our part in supporting Hong Kong now and in the future.”
HSBC is not alone among business titans supporting the law. The city’s biggest companies and most of its tycoons have spoken out in favour of the legislation, including Jardine Matheson Group, the operator of the Mandarin Oriental hotel; Swire Pacific, the parent of airline Cathay Pacific; and Li Ka-shing, one of Asia’s richest men.
US and UK politicians have criticised the bank’s decision, but most investors have remained silent on the issue.
Aviva Investors, the asset management arm of UK insurer Aviva, and Federated Hermes, on behalf of the institutional investors it represents, are among the few that have expressed their concerns publicly.
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