HSBC has back peddled on its carbon emissions targets, sparking backlash from environmental campaigners.
In HSBC’s 2024 annual report released this week, the bank announced it will no longer be working towards a target of 2030 to achieve net-zero carbon emissions, but will instead aim for a new date of 2050.
It also said it only expects to reduce emissions across its operations by 40% this decade.
“In 2020, we set an ambition to achieve net zero in our own operations and supply chain by 2030,” said the annual report.
“Progress in reducing emissions in the scope 3 supply chain component is proving slower than we anticipated. We currently expect a 40% emissions reduction across our operations, travel and supply chain by 2030 which would mean that we would need to rely heavily on carbon offsets to achieve net zero in our supply chain by 2030. As such, we have revisited our ambition, taking into account latest best practice on carbon offsets. We are now focused on achieving net zero in our operations, travel and supply chain by 2050.”
The bank said its clients and suppliers had “seen more challenges” in reducing their carbon footprint than expected.
“As a bank, our ability to finance our customers’ transition and, in turn, progress toward and meet our targets, relies on decarbonisation solutions scaling across sectors, alongside growing demand from our customers for capital to transition their business models…We are limited by, and cannot on our own overcome, the present lag in policy measures and the overall slower pace of the transition. These factors put our customers’, and our own, net zero ambitions at risk,” it said.
The announcement comes as US President Donald Trump’s administration continues to advocate for increased gas, coal and oil production and labeled net-zero carbon emission targets as “sinister.”
Critics of HSBC’s decision have also highlighted changes to the environmental targets in CEO Georges Elhedery’s pay package, which reduce the weighting of environmental measures in his targets from 25% to 20%. The new bonus package is worth up to £9m, or 600% of Elhedery’s base salary.
Since Donald Trump’s return to office, there has been a notable shift in the financial sector’s approach to green targets and ESG initiatives. Several major US banks have withdrawn from global climate commitments, such as the Net-Zero Banking Alliance, citing regulatory uncertainties and a renewed focus on traditional energy investments.
“HSBC is just putting its feet up and watching the world burn, rather than owning its responsibility for the climate crisis,” Joanna Warrington at Fossil Free London told The Guardian.
