HSBC plans to become net zero bank

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The FINANCIAL — HSBC announced an ambitious plan to prioritise financing and investment that supports the transition to a net zero global economy, citing a landmark opportunity to build a thriving, resilient future for society and businesses.

The bank is committing to align its financed emissions – the carbon emissions of its portfolio of customers – to the Paris Agreement goal to achieve net zero by 2050 or sooner. HSBC has both the scale and global reach to play a leading role in guiding its customers through this transition and helping them to achieve this ambitious goal. The bank also aims to be net zero in its operations and supply chain by 2030.

HSBC pledged to work with its customers in all sectors to develop tailored solutions to reduce emissions. The bank will increasingly prioritise financing and investment that contributes to the low carbon transition and will apply a climate lens to financing decisions. HSBC’s ambition is to support customers with between USD750bn and USD1 trillion of finance and investment by 2030 to help with their transition.

To achieve this ambition, HSBC aims to:

  • Align its business activities to the goals of the Paris Agreement and a pathway to net zero by 2050 or sooner
  • Enhance its support for customers in their transition to low carbon, providing dedicated financing support and advice for their unique transition journeys
  • Unlock new climate solutions by creating one of the world’s leading natural capital managers, creating a USD100m venture debt fund for CleanTech innovation, and launching a philanthropic programme to donate USD100m to bring new solutions to viability and scale
  • Work in partnership with its peers, customers, regulators, governments and wider society to effect change across the financial system
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HSBC is well-established as a leading player in the transition to a low carbon economy. In 2017, the bank committed USD100bn of sustainable finance by 2025, and has since launched a number of award-winning products, and been recognised as a leading bank for sustainable finance. However, the bank recognises that achieving the Paris Agreement goal will require extra effort, at a faster pace, and plans to use its scale and global reach to seek to accelerate the transition to net zero.

Group Chief Executive Noel Quinn said:

“HSBC has long been committed to opening up opportunities for our customers and the communities we serve. As we enter a pivotal decade of change, we have a landmark opportunity to accelerate our efforts to build a healthier, more resilient and more sustainable future. Our net zero ambition represents a material step up in our support for customers as we collectively work towards building a thriving low carbon economy.”

HSBC’s commitments in detail

  1. Becoming a net zero bank
    • Align our financed emissions – the carbon emissions of our portfolio of customers – to the Paris Agreement goal to achieve net zero by 2050 or sooner.
    • Use the Paris Agreement Capital Transition Assessment Tool (PACTA) to develop clear, measurable pathways to net zero.
    • Make regular, transparent, TCFD-aligned disclosures to communicate our progress, and encourage our customers to do the same.
    • Work with our peers, central banks and industry bodies to mobilise the financial system around a globally consistent, future-proofed standard to measure financed emissions, and a functioning carbon offset market.
    • Aim to achieve net zero in our operations and supply chain by 2030 or sooner.
  2. Supporting our portfolio of customers to thrive through transition
    • Work with our portfolio of customers to support them on their journey to lower carbon emissions, bringing together our dedicated ESG Solutions team, our award-winning products, and experts across the bank to develop tailored solutions for our customers.
    • Prioritise financing and investment that supports our customers in all sectors to transition to lower carbon emissions. Our ambition is to provide between USD750bn and USD1 trillion of financing and investment for this purpose over the next 10 years.
    • Increase our portfolio of transition finance solutions to help enable even the most heavy-emitting sectors to progressively decarbonise, while helping to ensure a just and stable transition to maintain economic stability.
    • Apply a climate lens to our financing decisions, taking into account the unique conditions for our clients across developed and developing economies.
  3. Unlocking next-generation climate solutions
    • Build one of the world’s leading natural capital managers – to mainstream natural capital as an asset class, and invest in activities that preserve, protect and enhance nature over the long-term. For this purpose, we have created HSBC Pollination Climate Asset Management.
    • Set up a dedicated unit and tailored proposition to support CleanTech innovation companies and target USD100m CleanTech investment within our technology venture debt fund.
    • Launch a philanthropic programme to donate USD100m to scale climate innovation ventures, renewable energy, and nature-based solutions between now and 2025.
    • Help transform sustainable infrastructure into a global asset class, and create a pipeline of bankable projects, leading the FAST-Infra initiative together with the OECD and the World Bank.
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