HSBC Reschedules Climate Targets, Delaying Net Zero Commitment to 2050
The bank revises its strategy on emissions reduction, pushing back operational and supply chain goals by two decades.
HSBC, the largest bank in the UK, has announced significant revisions to its climate strategy, specifically extending its timeline for achieving net zero emissions in its operations and supply chain from 2030 to 2050. The announcement was made during the publication of its annual results on Wednesday, marking a notable shift in its climate commitments.
Initially set in 2020, HSBC's interim climate goal aimed for a 2030 deadline to reduce emissions compared to a 2019 baseline.
The new timeline aligns the bank’s ambitions with a longer-term outlook, as it now targets a 40% reduction in emissions across its operations, travel, and supply chain by 2030.
In a further strategic development, HSBC is reviewing its 2030 targets related to financed emissions, which are the emissions generated from the projects and companies it finances.
The bank previously recognized its substantial financed emissions footprint and set sectorial targets to decrease lending to high-emission industries, which include oil, gas, aviation, and cement.
The outcomes of this review are expected to be announced later this year.
During a press conference, HSBC's CEO, Georges Elhedery, stated that reassessing their climate strategy was reasonable at this midpoint in their net zero plan.
The bank is still a member of the Net Zero Banking Alliance, despite some US banks withdrawing from the initiative, although Elhedery declined to comment on whether HSBC would consider similar moves concerning its climate commitments.
HSBC reported that while progress has been made in decarbonizing its operations, challenges persist in reducing emissions across its supply chain.
The bank has indicated that achieving its original targets would have required significant reliance on purchasing carbon credits, which, although aimed at funding global decarbonization projects, present issues of integrity and efficacy in the current fragmented market.
In reevaluating its ambitions, HSBC has acknowledged external factors influencing its climate goals, emphasizing that national policies and market developments significantly impact its ability to finance customers' transitions toward lower carbon models.
The bank cited various limitations, including technological advancements, market demand for climate solutions, and evolving customer preferences.
Responses from climate campaigners have highlighted concerns about HSBC's changing stance.
Jeanne Martin, head of ShareAction’s banking program, emphasized the financial risks associated with climate change, particularly regarding HSBC's exposure to emerging markets vulnerable to extreme weather events.
Concerns were also raised about HSBC’s prior removal of the chief sustainability officer role from its executive committee, indicating a potential shift in focus.
Zahra Hdidou, a senior climate and resilience adviser at ActionAid UK, described the announcements as alarming and urged the bank to reject the revised timeline and reconsider its financing practices related to environmentally damaging industries.
Campaigners have called on HSBC to ensure its policies align with global climate goals.
Initially set in 2020, HSBC's interim climate goal aimed for a 2030 deadline to reduce emissions compared to a 2019 baseline.
The new timeline aligns the bank’s ambitions with a longer-term outlook, as it now targets a 40% reduction in emissions across its operations, travel, and supply chain by 2030.
In a further strategic development, HSBC is reviewing its 2030 targets related to financed emissions, which are the emissions generated from the projects and companies it finances.
The bank previously recognized its substantial financed emissions footprint and set sectorial targets to decrease lending to high-emission industries, which include oil, gas, aviation, and cement.
The outcomes of this review are expected to be announced later this year.
During a press conference, HSBC's CEO, Georges Elhedery, stated that reassessing their climate strategy was reasonable at this midpoint in their net zero plan.
The bank is still a member of the Net Zero Banking Alliance, despite some US banks withdrawing from the initiative, although Elhedery declined to comment on whether HSBC would consider similar moves concerning its climate commitments.
HSBC reported that while progress has been made in decarbonizing its operations, challenges persist in reducing emissions across its supply chain.
The bank has indicated that achieving its original targets would have required significant reliance on purchasing carbon credits, which, although aimed at funding global decarbonization projects, present issues of integrity and efficacy in the current fragmented market.
In reevaluating its ambitions, HSBC has acknowledged external factors influencing its climate goals, emphasizing that national policies and market developments significantly impact its ability to finance customers' transitions toward lower carbon models.
The bank cited various limitations, including technological advancements, market demand for climate solutions, and evolving customer preferences.
Responses from climate campaigners have highlighted concerns about HSBC's changing stance.
Jeanne Martin, head of ShareAction’s banking program, emphasized the financial risks associated with climate change, particularly regarding HSBC's exposure to emerging markets vulnerable to extreme weather events.
Concerns were also raised about HSBC’s prior removal of the chief sustainability officer role from its executive committee, indicating a potential shift in focus.
Zahra Hdidou, a senior climate and resilience adviser at ActionAid UK, described the announcements as alarming and urged the bank to reject the revised timeline and reconsider its financing practices related to environmentally damaging industries.
Campaigners have called on HSBC to ensure its policies align with global climate goals.
