HSBC pledges net-zero carbon emission by 2050

By Rahul Vaimal, Associate Editor
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The British multinational investment bank HSBC has pledged for net-zero carbon emissions across its entire customer base by 2050 at the latest and to give between $750 billion and $1 trillion in financing to support its customers in achieving this goal, said Chief Executive Noel Quinn.

The pandemic has been an eye-opener for the world, the global economy became weak in front of this health event and it gives an insight of everything a major climate event can do, Quinn further added.

The global bank targets to attain net-zero in its operations by 2030. HSBC’s aim is to achieve this mission across its huge Asia-focused customer base and this is one of the most notable decisions taken by an international lender till date.

The bank will have to confront scrutiny if it is continues to finance deals with fossil fuel-related industries and will also be examined for how quickly it achieves the new goals, which are called as ‘aims’.

In the past activists, investors and politicians have highly criticized the bank accusing it of contributing to climate change by financing fossil fuel and other environmentally harmful projects.

Mr. Quinn stated that the bank’s strategy is to widen its capital markets focused on carbon transition policies, to a broader one enclosing all its activities across financing, asset management and corporate and retail banking.

Neol Quinn
Noel Quinn

“What we have given the market is an ambition that our total financing by 2050 will be net-zero, that is a far bigger prize or goal than picking a sub-segment of our portfolio and saying ‘I am not going to bank you’ because that’s not what the world needs.”

Lagging among peers

HSBC has faced huge criticism for the delay in reacting to the climate challenge compared to its peers. Earlier this week JPMorgan, a global financial company joined the list of banks that invest in clean energy and take efforts to net zero emissions by 2050, following the Paris climate pact.

The Asian banks including HSBC have a long association with the coal industry that largely contributes to global warming. The financial group gave no clue regarding its plans to achieve the aim and how it is going to tighten its regulations on lending to the coal industry.

The bank only revealed the climate lens that it would use in making financing decisions. The funding plans also include infrastructure projects and about a seven times increase from its 2017 climate pledge financing of $100 billion.

HSBC will also incorporate the use of the science-based Paris Agreement Carbon Transition Assessment Tool (PACTA) for its investors to closely watch the net-zero journey of the bank. Further, it will work with its peers to create a future-proofed standard to measure financed emission.

The global bank also targets to invest $100 million in clean technology and to donate another $100 million towards climate innovation businesses and renewable energy sources.