HSBC announced on Wednesday that it is abandoning its goal of achieving net-zero carbon emissions across its business by 2030, citing slow progress in the real economy. The bank now anticipates a 40% decrease in emissions by 2030 and aims to achieve a more ambitious net-zero target by the mid-century. It disclosed plans for an internal review of emissions targets related to its loans.
The bank's annual report highlighted its limited influence on external factors affecting emissions reductions, such as technological advancements, market demands, and policy effectiveness. The original emissions target was based on using carbon credits to offset some supply chain emissions, a practice not in line with recent Science Based Targets Initiative guidance.
Furthermore, HSBC's chief sustainability officer was removed from the executive committee by CEO Georges Elhedery in a previous management reorganization. Activists raised concerns over the bank's shift, fearing a retreat from its climate commitments, reflecting a broader trend in the banking industry where institutions are scaling back emission reduction initiatives. Notably, Morgan Stanley revised downward its emissions reduction expectations for corporate lending, and several U.S. banks have exited a climate coalition.