Background on HSBC and Its Climate Commitments
HSBC, a prominent British bank, has recently withdrawn from the global banking climate coalition. This move follows similar decisions by major U.S. banks as governments’ ambitious net-zero reduction targets cool down.
HSBC’s Rationale for Leaving the Coalition
HSBC stated that while it acknowledges the Net-Zero Banking Alliance’s (NZBA) role in developing guiding frameworks to assist banks in setting emission reduction targets, the foundational work is now complete. Consequently, HSBC decided to step out of the group while preparing to update its net-zero transition plan.
“We remain steadfastly focused on helping our clients finance their transition goals and advancing toward our ambition of net-zero emissions by 2050,” said an HSBC spokesperson.
Other global banks, including JPMorgan, Citi, Morgan Stanley, Macquarie, and Bank of Montreal, have also left the group this year. The coalition was established in 2021 to align the sector with the global objective of limiting climate warming by mobilizing more funds for environmentally-friendly activities and setting plans to reduce members’ emissions linked to their business operations.
HSBC’s Shift in Climate Commitments
In February, HSBC abandoned its 2030 emission reduction target, citing the slow progress toward a net-zero balance in the real economy.
“We strongly condemn HSBC’s decision to leave the NZBA, which is another concerning signal regarding the bank’s commitment to addressing the climate crisis,” said Jeanne Martin, co-director of Corporate Engagement.
The British government has a legally-binding commitment to achieve net-zero emissions by 2050.
“We are adopting a more measured approach regarding loans to the fossil fuel industry, which has raised concerns among some activists about potential backtracking on our climate pledges,” said Julian Wentzel, HSBC’s sustainability director, in February.
Key Questions and Answers
- What is the global banking climate coalition? It’s a group formed in 2021 to align the banking sector with the global goal of limiting climate warming by mobilizing more funds for environmentally-friendly activities and setting plans to reduce members’ emissions linked to their business operations.
- Which banks have left the coalition? Along with HSBC, JPMorgan, Citi, Morgan Stanley, Macquarie, and Bank of Montreal have all withdrawn from the coalition this year.
- Why did HSBC leave the coalition? HSBC stated that while it acknowledges the Net-Zero Banking Alliance’s role in developing guiding frameworks, the foundational work is now complete. The bank decided to step out of the group while preparing to update its net-zero transition plan.
- What are HSBC’s current climate commitments? HSBC aims to help clients finance their transition goals and advance toward net-zero emissions by 2050. However, they abandoned their 2030 emission reduction target, citing slow progress toward a net-zero balance in the real economy.
- What is the significance of HSBC’s decision? Critics, like Jeanne Martin, view HSBC’s withdrawal from the NZBA as a concerning signal about their commitment to addressing the climate crisis.
