Campaigners blast HSBC net zero ambitions

'HSBC’s net-zero commitment is a bit like saying you’ll give up smoking by 2050, but continuing to buy a pack a week'

UK-listed bank HSBC has unveiled a number of green initiatives including plans to target net zero carbon emissions by 2050, as well as earmarking $1trn for green financing to support clients making the sustainable transition.

The bank said it will target net zero carbon across its entire customer base by 2050 at the latest, but hopes to achieves net zero emissions in its own operations by 2030.

HSBC chief Executive Noel Quinn told Reuters: “Covid-19 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.”

The bank and a number of its peers have faced increasing pressure from shareholders and activists who say they are causing the environment more harm by financially supporting certain projects. According to the Banking on Climate Change report, HSBC is Europe’s second largest financier of fossil fuels.

CEO Quinn said to Reuters the firm will be expanding its capital markets focused carbon transitions to across its activities within its financing, asset management and corporate and retail banking.  

In a statement, the bank said it would also be “intensifying our support for customers to switch to more sustainable ways of doing business.”

It continued: “We believe we have the scale and global reach to play a leading role in advising them on their journey towards net zero and have an ambition to provide between $750bn and $1trn of finance and investment by 2030 to help them achieve this goal.”

Quinn also said in the statement: “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.”

‘Substantial’ carbon footprint

However, campaigners have said these commitments lack immediate exclusions of coal, oil and gas companies and those most responsible for deforestation.

They said if the new polices are to have any credibility, urgent action should be taken today to phase out support for coal and companies involved in further oil and gas extraction and infrastructure, on an explicit timeline that is aligned with limiting climate change to 1.5C.

Campaigners highlighted since the signing of the Paris Agreement, the bank has provided $87bn in financing to fossil fuel companies, and between 2017 and Q3 2019 provided nearly $8bn in loans and underwriting to 29 companies that are developing coal plants. Furthermore, it has  provided $2.4bn in loans and underwriting to the production and trade of commodities driving tropical deforestation, which plays a significant role in exacerbating climate change.

Jeanne Martin, senior campaign manager, ShareAction, commented on the HSBC announcement: “We welcome HSBC’s commitment to net zero by 2050. Since Barclays’ announcement in March 2020, net zero ambitions are quickly becoming the baseline in the banking industry. As shareholders made clear at the 2020 Barclays AGM, net zero ambitions need to be backed up by fossil fuel phase out targets to be credible.

“As Europe’s second largest financier of fossil fuels, we urge HSBC to commit to a global coal phase out and take immediate steps to curb its fossil fuel financing. This would leave no doubt of the bank’s commitment to net zero by 2050 – and give the world a chance to avert the worst consequences of climate change.”

Meanwhile, Hana Heineken, senior campaigner at Rainforest Action Network, said: HSBC’s carbon footprint has been “substantial” due “funding coal, oil and gas to the Amazon-destroying beef sector”.

“This net zero commitment is welcome, but if HSBC is serious about dealing with the climate crisis, then it needs to stop funding fossil fuel expansion and forest destruction now. Anything less is greenwash.”

Becky Jarvis, coordinator of Fund Our Future UK, a network of campaign groups, also added: “HSBC’s net-zero commitment is a bit like saying you’ll give up smoking by 2050, but continuing to buy a pack a week, or even smoking more. Any further financing of oil, gas, and coal expansion today is utterly at odds with a net-zero commitment by 2050. That’s just science, not finance.”