‘Huge loopholes’: Green groups slam HSBC’s new targets for cutting financed emissions

HSBC has published new targets for reducing financed emissions from its clients in the energy sector, claiming they are "net-zero-aligned". But campaign groups argue that they defer important decisions on coal and could lead to the bank financing oil and gas expansion.

‘Huge loopholes’: Green groups slam HSBC’s new targets for cutting financed emissions

The new targets, announced today (22 February), include reducing the absolute emissions reported by HSBC’s clients in the oil and gas sector by 34% by 2030, against a 2019 baseline. HSBC claims that this level of reduction is consistent with the pathway laid out by the International Energy Agency’s (IEA) landmark 2021 report on delivering global net-zero energy systems by 2050.

Scope 1 (direct), Scope 2 (power-related) and Scope 3 (indirect) emissions reported by companies financed by HSBC will be included in the accounting towards this target.

Campaign group Market Forces and other similar organisations have been quick to criticise HSBC’s approach, arguing that “huge loopholes” remain. Market Forces has pointed to the fact that HSBC’s target does not apply to bond underwriting and is focused on upstream integrated and diversified energy companies – meaning that midstream and downstream companies could have no credible plans to reduce emissions yet still receive backing from HSBC.

Market Forces has also argued that HSBC should not have deferred decisions on emissions reduction requirements for coal. The multinational bank published its first official thermal coal financing exit policy in December 2021, as it works to end financing for coal in OECD nations by 2030 and all other nations by 2040. That policy was, similarly, harshly criticised.

HSBC’s group chief sustainability officer Dr Celine Herweijer said the targets “are science-based and highlight to our customers the level of decarbonisation we need to see across our portfolio by 2030”.

Market Forces’ UK campaign lead Adam McGibbon said the commitment evidences the bank “finding a new and innovative way to fudge their emission reduction targets.”

Another aspect of the commitment that Market Forces takes issue with is the fact that there are no new measures to reduce or end financing for energy companies that are planning new and expanded oil and gas projects.

The IEA’s net-zero by 2050 scenario recommends that all expanded oil and gas capacity is halted immediately to give the world the best possible chance of capping warming below 1.5C. With this in mind, dozens of the world’s largest banks are facing calls to improve their exclusions policies.  

HSBC is maintaining that an inclusion-focussed, engagement-first approach would be more effective for reducing emissions in practice. Chief executive Noel Quinn said: “We are supporting clients to evolve their business models and replace old technology with new, greener alternatives. We will request and review science-based client transition plans and use them as the basis for further engagement.”

Also included in HSBC’s new commitments is a pledge to reduce the emissions intensity of power and utilities companies by 75%, also between 2019 and 2030. This target covers Scope 1 and 2 emissions.

“The choice to adopt an emissions intensity metric for power and utilities reflects the need to reduce global greenhouse gas emissions from power generation while also meeting growing electricity demand,” HSBC said in a statement. Ultimately, this target could allow absolute emissions from its power and utilities portfolio to grow.


In related news, NatWest Group has outlined updated plans to restrict lending to oil and gas businesses.

In its latest climate-related disclosures report, the company has confirmed that it will be divesting from all oil and gas companies where the majority of assets being financed are not based in the UK.

Firms with most of their assets in the UK will need to commit to reporting their absolute emissions by the end of 2023 to continue receiving NatWest’s backing. These requirements came into effect in January, the report confirms.

The report states that oil and gas lending makes up some 0.7% of NatWest’s total lending at present.

Sarah George

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