HSBC will look to achieve net zero emissions across its client base before 2050 – an ambitious target for the Asia-focused lender – alongside $750 billion to $1 trillion in green financing to support the transition.
The British lender will look to expand its carbon transition policies from just capital markets to cover activities across financing, asset management, and corporate and retail banking. This marks a seven-fold increase from its last pledge in 2017 to combat climate change set at $100 billion.
Within HSBC’s own operations, the bank aims to achieve net zero emissions by 2030. The bank will also target $100 million in investments towards clean technology alongside a $100 million donation to climate innovation ventures and renewable energy sources.
«COVID has been a wake-up call to us all, including me personally,» said HSBC CEO Noel Quinn in a «Reuters» report. «We have seen how fragile the global economy is to a major event, in this case a health event, and it brings home the reality of what a major climate event could do.»
More Than Just Exclusion
According to Quinn, the approach taken by other many competitors to simply bar those in need of financing for dirty energy is less effective if the aim is to actually reduce global warming.
«That industry or that customer may then just go to Bank X, Bank Y or Bank Z. They won’t have changed their business model,» he explained.
«What we have given the market is an ambition that our total financing by 2050 will be net zero, that is a far bigger prize or goal than picking a sub-segment of our portfolio and saying ‘I am not going to bank you’ because that’s not what the world needs.»
Tracking Progress
For its stakeholders, the bank said it would use Paris Agreement Capital Transition Assessment (PACTA) tools to scientifically track progress towards and regularly report progress.
And to create a «globally consistent, future-proofed standard» for the financial sector at large, HSBC said it would collaborate with peers, central banks and industry bodies to measure financed emissions and a «functioning carbon offset market».
When asked about its lending policy for the coal industry which remains prominent in Asian economies, Quinn did not provide details but said the bank would continue to apply «a climate lens» to financing decisions and while also accounting for «the unique conditions for our clients across developed and developing economies».
