Banking giant HSBC has bowed to investor pressure and pledged to ramp up its climate change plans with a shareholder vote on the proposals.

A 2.4 trillion US dollar (£1.7 trillion) coalition of 15 investment group and pension funds had lodged a special resolution at its upcoming annual shareholder meeting on May 28, calling for the bank to overhaul its financing of fossil fuels.

But HSBC said the group, led by campaign group ShareAction, had agreed to withdraw their resolution and back the bank’s own plans.

It comes after months of talks between the bank and the investors, while ShareAction has been pressing HSBC for action for about four years before tabling the resolution in January.

The move sees HSBC commit to science-based targets to align its financing of companies with the Paris Agreement goals to limit global warming.

It will start with the oil and gas, power and utilities sectors in 2021, before widening this to other sectors next year.

The lender will also look to phase out the financing of coal-fired power and thermal coalmining by 2030 in the EU and Organisation for Economic Co-operation and Development countries, with other global markets to follow by 2040.

And it will report on progress against its targets each year, starting from next year’s 2021 annual report and accounts.

HSBC will also offer between 750 billion US dollars (£537 billion) and 2 trillion US dollars (£1.4 trillion) in financing to support customers to “progressively decarbonise and help realise the opportunity for long-term, sustainable growth”.

The shareholder vote will be binding on the bank, if it gains the approval of 75% of investors.

Noel Quinn, chief executive of HSBC, said it marked the “next phase” of its net-zero strategy.

He said: “We are pleased that ShareAction and a group of shareholders have agreed to support the resolution and would like to thank them for their positive ongoing engagement and constructive challenge and input.”

“This represents an unprecedented level of co-operation between a bank, shareholders, and NGOs (non-governmental organisations) on a critical issue, with a positive outcome for all.”

The bank’s plans go much further than its proposals laid out last October, which pledged to see it reduce its carbon footprint, but did not include any ban on financial coal power.

Jeanne Martin, senior campaign manager at ShareAction, said: “Today’s announcement shows that robust shareholder engagement can deliver concrete results and sets an important precedent for the banking industry.

“Our focus now turns to ensuring it delivers on these commitments.”

Lucie Pinson, executive director of Reclaim Finance, added the shareholder vote is “only half the story”.

“Campaigners and climate-conscious investors will be watching to make sure HSBC delivers a strong policy that includes an immediate exclusion of all companies with coal expansion plans.”