HSBC PLC (LSE:HSBA), the banking giant, has emerged as a surprising champion of cutting global carbon emission rates.
Not that the bank itself is responsible for pumping out a lot of toxic fumes, except maybe when the cigars are lit on news that the staff bonus pool has been increased to US$3.5bn.
The bank does have control, however, over who it lends money to and in its 2021 results announced today, the company reaffirmed its ambition to align its financed emissions to net-zero by 2050 or sooner.
The company noted that it engaged shareholders and leading non-government organisations ahead of its recent annual general meeting, where its special resolution on the next steps in relation to its climate ambition was overwhelmingly approved.
“We also reviewed and approved a new thermal coal phase-out policy, which we announced in December 2021 and is designed to allow HSBC to help facilitate the transition to net zero in both developed and developing markets,” the company told investors.
“Since 2019, we have reduced greenhouse gas emissions across our operations by more than half. We also provided and facilitated US$82.6bn of sustainable finance and investment - bringing the cumulative total since 1 January 2020 to US$126.7bn, towards our ambition of US$750bn to US$1tn by 2030. Furthermore, we have collaborated with other banks and financial institutions to help accelerate the transition through initiatives including the Net-Zero Banking Alliance, the Glasgow Financial Alliance for Net Zero and the Sustainable Markets Initiative's Financial Services Taskforce,” the bank said.
Europe’s biggest banks led by HSBC, Barclays and BNP Paribas have provided £24bn ($32.5bn) to oil and gas companies that are expanding production less than a year since pledging to target net zero carbon emissions, data shows. https://t.co/8q0CHb70Zu pic.twitter.com/7147qJdOm3
— OilandGasPress.com (@oilandgaspress) February 16, 2022
The banking giant added it is committed to working with its clients to develop valid, science-based transition plans to understand - sector-by-sector and client-by-client - how it will achieve “net zero” by 2050.
Meanwhile, the news agency Reuters reports that the bank intends to cut emissions associated with loans made to oil and gas companies by a third this decade.
"This is rewiring the way we make financing and investment decisions from here on in," group chief sustainability officer Celine Herweijer told the news agency.
The bank’s transition plans and the targets within them must be predicated on the science relevant to the individual sectors, the bank stressed.
“We will use them as a basis for further engagement and decision making, including how we drive change within our portfolios. As part of this process, we have disclosed interim targets for on-balance sheet financed emissions in the oil and gas, and power and utilities sectors. In the year ahead, we plan to set interim targets for financed emissions across a range of other sectors. We will also work on our climate transition plan, which will be published in 2023 and will bring together in one place how we will embed our net-zero targets into our strategy, processes, policies and governance,” HSBC added.