HSBC Holdings Plc said it needs to walk back some of its earlier climate emissions goals as it responds to the slow pace of decarbonization in the wider economy.
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Bloomberg News
Ishika Mookerjee, Alastair Marsh and Sheryl Tian Tong Lee
Published Feb 19, 2025 • Last updated 2 days ago • 3 minute read
A sign featuring a HSBC Holdings Plc logo hangs outside a bank branch in London, U.K., on Wednesday, Nov. 6, 2019. The U.K. is headed to the polls on Dec. 12, bringing banks, utilities and housebuilders into focus for U.K. equity investors. Photographer: Hollie Adams/Bloomberg Photo by Hollie Adams /Bloomberg(Bloomberg) — HSBC Holdings Plc said it needs to walk back some of its earlier climate emissions goals as it responds to the slow pace of decarbonization in the wider economy.
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Emissions reductions targets for its operations that were initially set for 2030 have now been pushed back to 2050, HSBC said in connection with its fourth-quarter results on Wednesday. The bank also said it’s now reviewing the targets it set to reduce the emissions associated with its lending to seven high-carbon sectors.
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The decision was driven by a realization at the bank that its clients and suppliers “have faced some challenges” in decarbonizing their operations, Georges Elhedery, HSBC’s chief executive, said during a call with reporters.
It’s the latest retreat from climate goals that a number of financial behemoths say are becoming increasingly unrealistic to meet. They warn that cutting financed emissions in line with a scenario in which global warming is limited to 1.5C isn’t feasible in a world that’s currently on track for temperature rises of roughly twice that level.
In the US, banks just mounted a mass withdrawal from the industry’s biggest climate alliance, as they figure out how to navigate a world in which the issue of climate change has morphed into a political lightning rod. That’s as President Donald Trump takes a shredder to Biden-era climate policies, and as his administration mounts a full-throated attack on net zero initiatives.
Elhedery said HSBC is still a member of the Net-Zero Banking Alliance, which is now figuring out how to move forward after an exodus by North American banks. He didn’t speak to the extent to which HSBC will remain committed to NZBA in the future.
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After giving up on achieving its operational emissions targets by 2030, HSBC said it’s “now focused on achieving net zero in our operations, travel and supply chain by 2050.”
The bank expects to cut Scope 1 and Scope 2 emissions — pollution produced directly, or through the generation of power consumed — by more than 90% from a 2019 baseline by the end of the decade. Elhedery said HSBC will likely fall back on carbon credits to help address its residual emissions, in keeping with guidelines set by the Science Based Targets initiative.
“It is disappointing to see that HSBC has chosen to further weaken its climate target,” Lucie Pinson, the founder of climate nonprofit Reclaim Finance, said in an email. “If it cannot even strive to reduce emissions from its own operations and supply chain, there is little hope that it will trigger meaningful change through its investments.”
HSBC is now forecasting a smaller reduction in Scope 3, or emissions tied to customers and suppliers. The bank expects to curb pollution across “operations, business travel and supply chain” by 40% by 2030, it said.
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It’s through their loan books and investment portfolios that banks and asset managers are major contributors to global warming. The greenhouse-gas emissions associated with financial institutions’ investing, lending and underwriting activities are more than 700 times higher, on average, than their direct emissions, climate nonprofit CDP has said.
“Progress in reducing emissions in the Scope 3 supply chain component is proving slower than we anticipated,” the bank said.
Factors outside HSBC’s control that are impacting its ability to meet targets include the speed of “technological advancements, diversification of the energy mix, market demand for climate solutions, evolving customer preferences, and government leadership and effective policy,” HSBC said.
The bank has a 2030 target to cut financed oil and gas emissions by 34% from a 2019 baseline. On Wednesday, it said it had cut the emissions of its oil and gas portfolio by 46% to 23.2 million tons of CO2 equivalent in 2023. No data was provided for 2024.
HSBC is now reviewing individual 2030 targets for financed emissions in seven sectors, and will update investors in the second half of this year on its transition plan, the report said. The bank has begun conducting emissions reduction assessments for major clients in the automotive, aviation and cement sectors, among others, as it aims to grow its transition finance business.
The bank is also targeting a 70% reduction in financed emissions for the thermal coal mining sector but hasn’t disclosed any data after 2022.
Since the beginning of 2020, HSBC has allocated more than $390 billion in sustainable finance and investment after doing almost $100 billion in green and social financing in 2024, according to its annual report. That compares with a goal of between $750 billion and $1 trillion by 2030.
—With assistance from Andrew Janes and Natasha White.
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