At HSBC's annual general meeting (AGM) on May 2, 2025, a coalition of 30 institutional investors (representing $1.6 trillion in assets), led by the responsible investment NGO ShareAction, called on HSBC to reaffirm its net zero emissions commitment.

Investors stressed that HSBC should "continue to advance existing climate progress in achieving the net zero transition, rather than regress", and hoped that the bank would have a full dialogue with shareholders when formulating subsequent strategies.

HSBC's recent climate strategy adjustment

Postponement of net zero target: HSBC announced in February this year that it would postpone its 2030 operational and supply chain net zero emissions target by 20 years to 2050, and was reviewing its medium-term goal to reduce financing emissions in key carbon-intensive industries. HSBC pointed out that the global decarbonization rate was "slower than expected", affecting its ability to achieve its goals.

Changes in governance structure: HSBC removed the position of Chief Sustainability Officer from the Group Executive Committee and reorganized its leadership. Celine Herweijer, the group's former chief sustainability officer, resigned. This was seen by investors as a signal of lowering the priority of climate issues.

HSBC 2024 Annual Report

HSBC stated in its 2024 annual report: Supporting the transition to net zero emissions is the top priority of HSBC's strategy. Now that we are halfway towards our 2030 goal, HSBC is reviewing its mid-term goals and related policies for emissions from financing projects in 2030.

“In 2020, we set our ambition to achieve net zero emissions in our operations and supply chain by 2030. We continue to make good progress in reducing direct emissions, primarily from energy consumption. We are currently on track to achieve our target of reducing scope 1 and 2 emissions by more than 90% by 2030 compared to a 2019 baseline, through our planned energy efficiency measures and significant investments in renewable energy. However, progress in reducing scope 3 supply chain emissions remains slower than expected, mainly due to the slower pace of transition in the real economy.

It is clear that we will need to rely heavily on carbon offsets to achieve net zero emissions in our supply chain by 2030. This approach is not in line with the recent Science Based Targets initiative on the use of carbon offsets by companies to achieve net zero emissions.

We have therefore revisited this ambition to take into account the latest best practice guidance. We are now focused on reducing emissions from operations, travel and supply chain to achieve net zero emissions by the end of 2050. We expect to continue to report on our progress in 2030 and beyond. We currently expect emissions from operations, travel and supply chain to be reduced by around 40% by the end of 2030. ”

Several key ESG indicators that HSBC uses to measure progress towards its ambitions:

(Image source: HSBC 2024 Annual Report)

2024 Emissions performance

In 2024, HSBC's absolute operational GHG emissions (energy and business travel) will be reduced by 66.1% compared to the 2019 baseline. Overall, including supply chain emissions, related emissions will be reduced by 30.7% compared to 2019 and 5.5% compared to 2023.

In 2024, HSBC restated its 2019 baseline emissions, and supply chain emissions decreased by 8.4% compared to 2019, and remained relatively stable compared to 2023, with only a slight decrease of 1.0%. This was mainly due to suppliers of real estate-related services and financial services, while emissions from suppliers of technology-related goods and services increased due to increased investments by suppliers themselves (such as data centers), expansion of new services (such as cloud and artificial intelligence), and increased spending by HSBC.

Concerns among investors and environmental groups

"After removing its chief sustainability officer from its executive committee in February and announcing plans to review its climate targets and policies, HSBC is sending a deeply worrying signal about whether managing the rapidly multiplying financial risks of global warming remains a priority," said Jeanne Martin, head of banking at ShareAction.

"While HSBC has in the past demonstrated its leadership on climate by stopping funding new oil and gas projects, responsible investors are now being left in the dark about the vital role HSBC will play in ensuring long-term prosperity for the global economy."

"This group of investors is calling on the bank to urgently state that it will build on existing climate progress, not backtrack, and to conduct this process in dialogue with shareholders. If the bank fails to do this, shareholders should not be expected to remain silent."

At the AGM, outgoing HSBC chairman Mark Tucker confirmed the bank's commitment to "becoming a net zero emissions bank by 2050", but reiterated the bank's conclusion that achieving its climate goals is more difficult than expected given the speed of change in the overall economy.

Although HSBC reiterated its 2050 net zero commitment, investors criticized its lack of credible short-term actions to support long-term goals.

Environmental groups pointed out that HSBC's adjustments may trigger a chain reaction, prompting other financial institutions to follow suit and weakening the overall progress of global climate action.

This action highlights the continuous scrutiny of institutional investors on the climate commitments of financial institutions. Investors require that their climate strategies must be consistent with the scientific emission reduction path and have transparent phased actions.

Attached: Investors who signed the statement include: AkademikerPension, Australian Ethical, Axiom Alternative Investments, Bank J. Safra Sarasin, Barrow Cadbury Trust, Border to Coast Pension Partnership, Church of England PB, EdenTree Investment Management, Epworth Investment Management, Ethos Foundation, Ethos Engagement Pool International, Ethos Engagement Services Clients, EQ Investors, Folksam, Friends Provident Foundation, Greater Manchester Pension Fund, Jesuits in Britain, KLP, Local Authority Pension Fund Forum, Merseyside Pension Fund, Nest, P1 Investment Services, Rathbones Investment Management, Sarasin & Partners LLP, Smart Pension, Sparinvest, Trinity College Cambridge.

Author：Qinger