Exclusive: HSBC targets net zero emissions by 2050, earmarks $1 trillion green financing

Latest News 2020-10-09

HSBC will target net zero carbon emissions across its entire customer base by 2050 at the latest, and provide between $750 billion and $1 trillion in financing to help clients make the transition, Chief Executive Noel Quinn told Reuters.

COVID has been a wake-up call to us all, including me personally. 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,” Quinn told Reuters in a 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 goals, HSBC’s aim to achieve it across its huge Asia-focused client base is one of the most significant pledges made by a global lender to date.

 

However, the bank will be closely watched for how quickly and fully it pursues its new goals, which are mainly stated as aims rather than hard commitments.

 

It will also face scrutiny on whether it has allowed itself leeway to continue financing some fossil fuel-linked clients, especially in developing markets.

 

HSBC has come under increasing pressure from activists, shareholders and politicians who say it is contributing to climate change by financing environmentally harmful projects.

 

With many Asian clients directly connected to or reliant on the coal sector - from which emissions are a leading contributor to global warming - HSBC is in a relatively tougher position.

 

It gave no detail on plans to tighten its policy on lending to the coal industry - still a key driver of many Asian economies - in a move likely to anger campaigners.

 

Instead, the bank said it would apply “a climate lens” to financing decisions and would also continue to take into account “the unique conditions for our clients across developed and developing economies”.

 

Several pressure groups said they were disappointed the bank was not taking more immediate action.

 

The ramped up financing plans, including infrastructure projects, equate to a seven-fold increase compared with HSBC’s last financing climate pledge of $100 billion, made in 2017, with investments making up the remainder.

 

To help stakeholders track its journey to net zero, HSBC said it would use the science-based Paris Agreement Capital Transition Assessment tool (PACTA) and would report on progress regularly.

 

In addition, the bank said it would work with peers, central banks and industry bodies to help create “a globally consistent, future-proofed standard” to measure financed emissions and a “functioning carbon offset market”.

 

HSBC will also aim to invest $100 million in clean technology, and donate a further $100 million towards climate innovation ventures and renewable energy sources, alongside its previous commitment of funding to a new natural capital venture.

 

By Lawrence White, Sinead Cruise, Simon Jessop /  Oct,9th
Cite and Extract fromReuters

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