HSBC will provide between $750 billion and $1 trillion in green financing to help clients achieve this transition. While some environmental groups have criticized HSBC for not immediately ending its fossil fuel financing, this represents the most aggressive climate goal yet among major European banks. [https://live.staticflickr.com/943/41389102985_cab98b1edb_b.jpg] HSBC will aim for all clients to achieve net-zero carbon emissions by 2050 and will provide green financing to help them achieve this transition. Photo credit: Can Pac Swire (CC BY-NC 2.0) HSBC aims to achieve net zero carbon emissions across its business by 2030. "COVID-19 is a wake-up call for everyone, myself included," Quinn said in a video interview. "We've seen how vulnerable the global economy is to major events, and we can only imagine what the climate crisis will be like." Quinn stated that HSBC aims to achieve net zero emissions across its business by 2030. While HSBC is not the first British bank to set a net zero target (NatWest is another), achieving this goal is challenging given HSBC's large Asian client base, making it one of the most significant climate commitments by a global bank to date. However, close scrutiny will be focused on how quickly and fully HSBC achieves this goal, as it is still a target, not a firm commitment. Furthermore, scrutiny will be focused on whether HSBC will maintain a viable path to continue serving clients with ties to fossil fuels, particularly in developing markets. HSBC has come under considerable pressure from environmental activists, shareholders, and politicians, accusing it of funding environmentally harmful activities and being responsible for climate change. Many of HSBC's Asian clients are tied to the coal industry, making its net-zero target particularly challenging. Quinn stated that HSBC's carbon transition policy, originally limited to capital markets, will now be actively expanded to cover all of its financial services, asset management, and corporate and retail financing businesses. "Our ambition is to achieve net-zero emissions for all financing by 2050. This ambition goes far beyond singling out a small number of industries from our portfolio and refusing to do business with them, as this will not solve the world's problems. The industry or client will simply switch to another bank, without changing their business model." Critics say HSBC is lagging behind other banks in climate action and risks losing ground to rival BNP Paribas, which is significantly ahead in setting emissions reduction targets. This week, Wall Street heavyweight JPMorgan Chase also announced it would expand its investments in clean energy, joining the ranks of those aiming for net-zero emissions by 2050. HSBC faces a particularly daunting challenge because many of its Asian clients are directly tied to or interdependent with the coal industry, whose carbon emissions are a major contributor to global warming. HSBC's lack of details on tightening its lending policies for the coal industry, still a key driver of many Asian economies, may not please environmental groups. Instead, the bank stated only that it incorporates climate factors into its financing decisions and will continue to consider the "unique conditions of clients in developing economies." HSBC has been criticized for calling its plan "ambition zero" rather than "net zero." Several pressure groups expressed disappointment that HSBC did not take immediate action. Lucie Pinson, founder and executive director of Reclaim Finance, said: "The most basic demand is to immediately exclude all companies with coal expansion plans and demand that others begin phasing out coal, as BNP Paribas and many more serious banks have done." Adam McGibbon, UK energy finance campaign director at Market Forces, criticized HSBC's plan for calling it "ambition zero" rather than "net zero." To understand HSBC's true stance on climate change, look to the people it finances, not its slick marketing campaigns. Jeanne Martin, senior campaign manager at ShareAction, welcomed the bank's announcement but stressed that a commitment to net zero by 2050 is "already a standard for the banking industry." "As Europe's second-largest bank in fossil fuel financing, we call on HSBC to work towards a global coal phase-out and urgently seek to reduce its fossil fuel financing," she said. HSBC said it would work with all parties to develop "globally consistent, forward-looking standards." HSBC's new financing program, which includes infrastructure projects, is seven times the size of its previous $100 billion climate finance commitment in 2017, with the remainder coming from investments. To help stakeholders track progress towards net zero emissions, HSBC said it will use the science-based Paris Agreement Capital Transition Assessment Tool (PACTA) and will report on progress regularly. HSBC also said it will work with peers, central banks, and industry bodies to help develop "globally consistent, forward-looking standards" for measuring financed emissions and a "viable carbon offset market." In addition to its previous commitment to invest in new natural capital enterprises, HSBC will invest a further $100 million in clean technologies and donate $100 million to climate innovation enterprises and renewable energy.
