HSBC has pushed back its net-zero emissions target by two decades, setting a new goal of 2050 instead of 2030, according to a Reuters report.
The bank attributes this decision to the sluggish pace of economic transition, raising concerns among environmental advocates about major lenders scaling back their climate commitments.
HSBC now targets a 40% reduction in emissions from its operations, business travel, and supply chains by 2030.
Additionally, HSBC has initiated an internal review of emission targets associated with its lending activities.
Julian Wentzel, HSBC’s Chief Sustainability Officer, noted that collaborating with clients has highlighted significant challenges they encounter in transitioning to cleaner operations.
He emphasised the necessity for a more measured approach to oil and gas financing, suggesting increased flexibility in the bank’s policies rather than a complete overhaul of industry funding.
Wentzel explained that the original 2030 target relied on carbon credits to offset supply chain emissions, a practice that doesn’t align with updated guidance from the Science Based Targets Initiative.
This adjustment aligns HSBC’s net-zero timeline with other financial institutions like Goldman Sachs and Barclays.
The bank stated that it has limited control over factors such as technological advancements, market demand, and effective policy implementation, which influence the rate of change.
HSBC also noted that the process of revising its targets began before other U.S. banks adjusted their approaches.
The announcement comes as HSBC reported strong financial results for 2024, with a US$2.3 billion increase in profit, driven by higher net interest income and business growth.
The bank has also outlined cost-cutting measures, including restructuring and severance costs aimed at reducing expenses by US$1.5 billion annually by 2026.
Featured image credit: Edited from Freepik
