HSBC sets 2050 net-zero financed emissions target for £36bn UK pension scheme

The commitment from the HSBC Bank UK Pension Scheme will cover its entire £36bn portfolio of defined benefit and defined contribution assets.

A 2019 baseline year has been set for the 2030 target and, for both the 2030 and 2050 milestones, the scheme will be following the Net-Zero Investment framework developed by the Institutional Investors Group on Climate Change (IIGCC) – a coalition of dozens of major investors, including the pension scheme and collectively managing more than $11trn of assets.

The framework was first trialled in real-world scenarios in the second half of 2020, on portfolios totalling $1.3trn. It is designed to help investors assess how and when to divest from high-emitting companies without credible decarbonisation plans; engage with companies that are developing such plans, and invest in more projects and companies providing climate solutions on the road to net-zero. Trials were scaled up to $8trn of assets this spring.

The HSBC Bank UK Pension Scheme’s Trustee Board chair, Russell Picot, said: “The Trustee recognises the increased urgency with which climate change needs to be tackled and in it playing an active role in supporting the drive to decarbonise the economy.

It has been active in addressing ESG issues for a number of years, including working in collaboration with regulators, policymakers, asset managers and other asset owners to facilitate the system-wide transition to a net-zero economy.

“The time is right to take the next step to further embed climate change actions into our future plans for the benefit of our members.”

The new 2030 and 2050 targets come after the scheme signed on to the UN’s Principles for Responsible Investing (PRI) and joined the Climate Action 100+, an investor coalition specialising in corporate engagement on climate issues.

For HSBC more broadly, the financial giant committed last October to reaching net-zero financed emissions by 2050 and outlined plans to finance at least $750bn of low-carbon activities within a decade. However, ShareAction claims that in that HSBC funneled $1.8bn into fossil fuel companies in the build-up to the announcement.

Since then, shareholders have voted to pass a resolution requiring HSBC Holdings to phase out finance for the coal industry by 2030 in the OECD and by 2040 worldwide.

Pension pledges

Earlier this week, the £10.6bn Transport for London (TfL) pension fund, £4.5bn Avon Pension Fund, and Phoenix Group, which manages £250bn of investments, have all set interim ambitions to reduce financed emissions on the road to net-zero.

You can read edie’s full coverage of those announcements here.

Sarah George

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