Exclusive: HSBC targets net zero emissions by 2050 and sets aside $ 1,000 billion in green funding
LONDON (Reuters) – HSBC will aim for net carbon emissions for all of its customers by 2050 at the latest and provide between $ 750 billion and $ 1,000 billion in financing to help customers make the transition, told Reuters chief executive Noel Quinn.
The pledge is the strongest statement from Europe’s largest bank on climate change to date, although it has faced criticism from some environmental groups for failing to take more immediate action to limit its funding. fossil fuels.
“COVID has been a wake-up call to all of us, including me personally. We have seen how fragile the global economy is in the face of a major event, in this case a health event, and it brings to mind the reality of what a major climate event could do, ”Quinn told Reuters in a report. video interview.
HSBC aims to achieve net zero emissions in its own operations by 2030, he added.
While other UK banks such as NatWest have already set similar net zero targets, HSBC’s goal of achieving this across its vast Asian-focused customer base is one of the most important commitments a global lender to date.
However, the bank will be closely watched as to how quickly and comprehensively it pursues its new goals, which are primarily stated as targets rather than firm commitments.
It will also need to be carefully scrutinized to determine whether it has given itself leeway to continue funding certain fossil fuel-related customers, especially in developing markets.
HSBC is under increasing pressure from activists, shareholders and politicians who claim it is contributing to climate change by funding projects that are harmful to the environment.
Quinn said the bank is focused on expanding its carbon transition policies focused on capital markets to a broader one encompassing all of its corporate and retail finance, asset management and banking activities. .
“What we have given to the market is the ambition that our total funding by 2050 be net of zero, it is a price or a much more important objective than choosing a sub-segment of our portfolio and to say ‘I’m not going to bank you’ because that’s not what the world needs, ”he said.
“That industry or that customer can then just go to Bank X, Bank Y, or Bank Z. They won’t have changed their business model. “
Critics said HSBC lags behind its peers in responding to the climate challenge and risks losing to competitors such as BNP Paribas, which are ahead of setting carbon reduction targets.
This week, Wall Street heavyweight JPMorgan became the latest bank to step up investment in clean energy and work towards net zero emissions by 2050, in line with the 2015 Paris Climate Agreement.
With many Asian customers directly connected or dependent on the coal sector – whose emissions are one of the main contributors to global warming – HSBC is in a relatively more difficult position.
He gave no details of plans to tighten his lending policy to the coal industry – still a key driver of many Asian economies – in a move likely to anger activists.
Instead, the bank said it would apply “a climate lens” to funding decisions and also continue to take into account “the unique conditions for our clients in developed and developing economies.”
Several lobby groups said they were disappointed the bank did not take more immediate action.
“The bare minimum would be to immediately exclude all companies with coal expansion plans and demand that others adopt a coal exit strategy, as BNP Paribas and many more serious banks have already done.” , said Lucie Pinson, Founder and Executive Director of Reclaim Finance. .
Adam McGibbon, UK energy finance activist at Market Forces, said the plan was “zero ambition, not ‘net zero ambition’. not their fluffy marketing.
Jeanne Martin, senior campaign manager at ShareAction, said that while welcome, the commitment to net zero by 2050 was “fast becoming the benchmark in the banking industry.”
“As Europe’s second-largest fossil fuel funder, we urge HSBC to embark on a global exit from coal and take immediate action to curb its fossil fuel financing.
The acceleration of financing plans, including infrastructure projects, equates to a seven-fold increase from HSBC’s last climate finance pledge of $ 100 billion, made in 2017, with investments making up the rest.
To help stakeholders on its journey to net zero, HSBC said it will use the Paris Agreement’s Scientific Capital Transition Assessment Tool (PACTA) and report regularly on progress.
Additionally, the bank said it would work with peers, central banks and industry bodies to help create “a globally consistent and sustainable standard” for measuring financed emissions and a “marketplace. functional carbon offset ”.
HSBC will also aim to invest $ 100 million in clean technology and donate an additional $ 100 million to climate innovation projects and renewable energy sources, alongside its previous commitment to fund a new natural capital project.
Reporting by Lawrence White, Simon Jessop, Sinead Cruise; Editing by Rachel Armstrong, Susan Fenton and Mark Potter