HSBC announced today the launch of its first Net Zero Transition Plan, outlining the global bank’s strategy to finance and support the transition to net zero, and to meet the climate goals it has set over the past few years.
The launch of the plan follows HSBC’s initial 2050 net zero target, set by the bank in 2020, which included a commitment to align its financing activities with the goals of the Paris Agreement, with the carbon emissions of clients and projects financed by HSBC reduced to net zero by 2050 or sooner. At the time, HSBC also stated that it will increasingly prioritize financing and investment that contributes to the low carbon transition and will apply a climate lens to financing decisions, and set a goal to support customers with between $750 billion and $1 trillion of finance and investment by 2030 to help with their transition.
The new plan details HSBC’s approach to achieving its climate ambitions, focusing on the bank’s visions and strategic approach to use financing and investment choices to support decarbonization, sector transitions, and its implementation plan.
In the plan, HSBC acknowledges that its “starting point in the transition to net zero is one of a heavy financed emissions footprint,” with a balance sheet weighted towards key emissions-heavy sectors, which will make its transition “challenging and complex.”
Since announcing its long-term net zero goal in 2020, HSBC has set a series of interim targets to reduce its financed emissions footprint within its top carbon-intensive sectors, including oil & gas, power and utilities, cement, iron, steel & aluminum, automotive and aviation, in addition to announcing policies to end financing new oil and gas projects or for new metallurgical coal mines. The new plan provides detailed overviews of the bank’s transition plans for each of these sectors.
For the oil and gas, for example, the plan notes that with over three quarters of HSBC’s financed emissions from the sector coming from a concentrated group of companies, it will take a materiality-based approach focused on engagement, particularly on these companies’ transition plans, while also supporting clients with transition solutions by helping to finance the development of cleaner energy projects such as wind, solar, nuclear and bioenergy. Alternatively, in hard-to-abate sectors such as iron, steel and aluminum, which will rely on early stage technologies to meet long-term decarbonization goals, HSBC’s plan includes supporting clients in “scaling investment into nascent technologies, such as clean hydrogen and CCS,” and to look for opportunities to support startups developing new solutions for the sectors.
Celine Herweijer, Group Chief Sustainability Officer, HSBC, said:
“We are present in the regions, the markets and the sectors that arguably make the biggest impact in terms of future emissions. We have an opportunity to support them to make the transition and catalyse the new economy, following the science and leveraging our entrepreneurial spirit.”
The plan also details HSBC’s approach to its implementation, focused on the key aspects of supporting customers in their transitions through engagement and providing transition solutions, embedding net zero across the bank’s business, including its products and services, risk management policies, board governance, and executive compensation programs, and its engagement and partnerships with governments and regulators, as well as with the finance industry to shape the development of standards, regulation and policies to support the transition.
Noel Quinn, Group Chief Executive, HSBC, said:
“As one of the world’s largest international banks, HSBC is well placed to help support and finance the economic transformation required to reach net zero.”
Click here to access the HSBC Net Zero Transition Plan.