HSBC Holdings PLC pushed back its deadline to meet a number of key climate targets by two decades and is reviewing other objectives, as Europe’s biggest bank yesterday said its efforts to cut emissions are being hampered by the slow pace of decarbonization in the wider economy.
“We are now focused on achieving net zero in our operations, travel and supply chain by 2050,” HSBC said in a report alongside its fourth-quarter earnings. “Progress in reducing emissions in the Scope 3 supply chain component is proving slower than we anticipated.”
It is the latest retreat from climate goals that a number of financial behemoths say are becoming increasingly unrealistic to meet.
Photo: AFP
They say that cutting financed emissions in line with a scenario in which the average global temperature rise is limited to 1.5°C above preindustrial levels is not feasible in a world on track for roughly twice that level of warming.
HSBC now expects to cut Scope 1 and Scope 2 emissions — pollution produced directly, or through the generation of power consumed — by more than 90 percent from a 2019 baseline by the end of the decade. It forecast a smaller reduction in Scope 3, emissions tied to suppliers and customers.
The bank expects to curb pollution across “operations, business travel and supply chain” by 40 percent by 2030, it said in the report.
Factors outside the bank’s control that are affecting its ability to meet targets include the speed of “technological advancements, diversification of the energy mix, market demand for climate solutions, evolving customer preferences, and government leadership and effective policy,” HSBC said.
The bank is reviewing its 2030 targets for financed emissions in seven sectors, and would update investors in the second half of this year on its transition plan, the report said.
HSBC has begun conducting emissions reduction assessments for major clients in the automotive, aviation and cement sectors, among others, as it aims to grow its transition finance business.
Meanwhile, HSBC said it would incur US$1.8 billion in charges over the next two years as it embarks on a global restructuring program that has seen the lender shutter some of its businesses and slash management ranks.
“Since becoming CEO, I have focused on simplifying how we operate,” chief executive officer Georges Elhedery said in a statement in which he also detailed a US$2 billion share buyback. “We are creating a simple, more agile, focused bank built on our core strengths.”
HSBC said pretax profit rose 6 percent to US$32.3 billion last year, beating an estimate of US$31.7 billion compiled by Bloomberg.
Profit attributable to shareholders edged up 2 percent to US$22.9 billion.
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