Daily Mirror (Sri Lanka)

HSBC tar­gets net zero emis­sions by 2050, ear­marks US$ 1 trln green fi­nanc­ing

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LONDON (Reuters) - HSBC will tar­get net zero car­bon emis­sions across its en­tire cus­tomer base by 2050 at the lat­est, and pro­vide be­tween US$ 750 bil­lion and US$ 1 tril­lion in fi­nanc­ing to help clients make the tran­si­tion, Chief Ex­ec­u­tive Noel Quinn told Reuters.

The pledge is the strong­est state­ment by Europe’s big­gest bank on cli­mate change to date, al­though it met with crit­i­cism from some en­vi­ron­men­tal groups for not tak­ing more im­me­di­ate ac­tion to curb its fos­sil fuel fi­nanc­ing.

“COVID has been a wakeup 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,” Quinn told Reuters in a video in­ter­view.

HSBC aims to achieve net zero emis­sions in its own oper­a­tions by 2030, he added.

While other UK banks such as Natwest NWG.L have al­ready set sim­i­lar net zero goals, HSBC’S aim to achieve it across its huge Asia-fo­cused client base is one of the most sig­nif­i­cant pledges made by a global lender to-date.

How­ever, the bank will be closely watched for how quickly and fully it pur­sues its new goals, which are mainly stated as aims rather than hard com­mit­ments.

It will also face scru­tiny on whether it has al­lowed it­self lee­way to con­tinue fi­nanc­ing some fos­sil fuel-linked clients, es­pe­cially in de­vel­op­ing mar­kets.

HSBC has come un­der in­creas­ing pres­sure from ac­tivists, share­hold­ers and politi­cians who say it is con­tribut­ing to cli­mate change by fi­nanc­ing en­vi­ron­men­tally harm­ful projects.

Quinn said the bank was fo­cused on ex­pand­ing its cap­i­tal mar­kets-fo­cused car­bon tran­si­tion poli­cies to a broader one en­com­pass­ing all its ac­tiv­i­ties across fi­nanc­ing, as­set man­age­ment, and cor­po­rate and re­tail bank­ing.

“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,” he said.

“That in­dus­try or that cus­tomer may then just go to Bank X, Bank Y or Bank Z. They won’t have changed their business model.”

Crit­ics have said HSBC lagged peers in re­spond­ing to the cli­mate chal­lenge and risked los­ing out to ri­vals such as BNP Paribas that are ahead on set­ting car­bon re­duc­tion tar­gets.

This week, Wall Street heavy­weight Jpmor­gan be­came the lat­est bank to ex­pand in­vest­ment in clean en­ergy and work to­wards net zero emis­sions by 2050, in line with the 2015 Paris Agree­ment on cli­mate.

With many Asian clients di­rectly con­nected to or re­liant on the coal sec­tor - from which emis­sions are a lead­ing con­trib­u­tor to global warm­ing - HSBC is in a rel­a­tively tougher po­si­tion.

It gave no de­tail on plans to tighten its pol­icy on lend­ing to the coal in­dus­try - still a key driver of many Asian economies - in a move likely to anger cam­paign­ers.

In­stead, the bank said it would ap­ply “a cli­mate lens” to fi­nanc­ing de­ci­sions and would also con­tinue to take into ac­count “the unique con­di­tions for our clients across de­vel­oped and de­vel­op­ing economies”.

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