The HSBC bank has secretly been coordinating efforts within the banking sector to water down a net-zero emissions climate change program which was co-launched on 21st April 2021 with 43 founding banks and the Prince of Wales’ sustainable Markets Initiative Financial Services Taskforce.
Essentially HSBC have been seeking to delay a key deadline and to scrap mandatory science-based targets for aligning their lending and investment portfolios with net-zero emissions by 2050.
These scurrilous efforts to undermine the international agreement began with an email, sent from the office of HSBC’s chief executive, Noel Quinn to the Net-Zero Banking Alliance (NZBA), which is an initiative launched by Mark Carney, the former governor of the Bank of England.
NZBA and FSTF
The NZBA brings together more than 50 banks, including HSBC, Bank of America, Barclays and Santander. Essentially it requires all of them to set a target to cut carbon emissions from their lending and investment portfolios to net zero by 2050.
It also requires them to set an interim target for 2030.
Under the NZBA, banks are required to set sector-level targets for the majority of carbon-intensive sectors – such as fossil fuels, real estate, agriculture and steel – within 18 months of signing, and all remaining sectors within three years.
The FSTF operates as an industry sub-group of the SMI and is chaired by Noel Quinn, Group Chief Executive of HSBC.
HSBC staff coordinate the FSTF’s 12 member banks. When the task force was first set up earlier this year, Quinn said,
“The FSTF is committed to accelerating efforts within the banking sector to move towards a net-zero economy”.
However, rather than accelerating efforts, it appears that both these coalitions are now lobbying for longer deadlines and are arguing against the mandatory use of science-based scenarios in order to set their targets.
The Evil Email
The evil email in question came from the office of HSBC’s chief executive, Noel Quinn. Quinn is also chairman of the Financial Services Taskforce (FSTF), a group originally convened by Prince Charles.
In the email, (which was sent on behalf of 12 of the member banks), it said they should have three years from signing the NZBA commitment – rather than the agreed 18 months – before setting their 2030 target.
The email also tried to weaken the commitment further by discarding any requirements for science-based targets.
Natasha Landell-Mills, head of stewardship at Sarasin & Partners, an investment firm that manages £19.3bn of assets and holds HSBC shares on behalf of clients, said:
“Any evidence that HSBC has lobbied against robust action on climate change would be concerning. I would like more information about the context and would then look to take the appropriate action.
We’ve got a climate crisis that we need to address and the more we have banks pushing back on policies and regulations that are intended to accelerate action to combat climate change, the slower that action will be and all of us would suffer as a result.”
HSBC has been one of Europe’s biggest funders of fossil fuels, ploughing £17.3bn into the sector in 2020 and helping the world’s most polluting company raise £10.3bn
The FSTF asked to remove the list of sectors that must be included in the first round of target-setting, effectively making the commitment less rigorous.
It suggested targets should only be set for sectors where there are “credible transition pathways” to a net-zero future, or plans showing how those sectors will become more sustainable, which could be highly subjective.
The FSTF also said banks should be given until 2025 or 2030 to set targets for some carbon-intensive sectors.
Scientists say emissions must fall by 45% from 2010 levels by 2030 to limit global warming to 1.5C, meaning any delay stands in direct opposition to the urgency required to tackle the climate crisis.
The Real HSBC
HSBC has been one of Europe’s biggest funders of fossil fuels, ploughing £17.3bn into the sector in 2020 alone.
Despite its commitment (last October) to cut financed emissions to net zero by 2050, HSBC has since helped Saudi Aramco, the world’s most polluting company, raise £10.3bn. They have also helped Qatar Petroleum to raise £9.2bn in order to fund the expansion of the world’s largest gas field.
Dr Andrew Harper, head of ethics at Epworth Investment Management – which manages £1.3bn in client assets and is an HSBC investor and customer. He said that if a bank had been involved with this kind of lobbying, it is…
“Incredibly discouraging to those of us attempting to genuinely engage with companies for a more sustainable future. It would raise serious questions around a company’s commitment to science, the planet, and its people – especially the poor.”
And HSBC Say….
When asked about the lobbying, the HSBC PR dept said HSBC represented the views of the 12 member banks of the FSTF. They also said the email sent from the office of HSBC’s chief executive in March – when the bank held the roles of chair and secretariat of the FSTF – did not reflect HSBC’s own position.
However the HSBC PR dept gave no indication that HSBC did not endorse the views expressed in the email.
HSBC signed up to the NZBA and said it had already committed to higher standards in its shareholder resolution on climate change, which was published shortly before it sent the email.
The NZBA have also acknowledged the lobbying email, noting that it was a normal part of the process to gather thoughts from several parties.
“HSBC categorically denies these allegations. HSBC did not lobby to dilute the ambition of the NZBA.”
Colin Baines, investment engagement manager at Friends Provident Foundation, an HSBC shareholder, said:
“HSBC is now legally obliged to produce a low-carbon transition strategy and it expressly mentions being science-based and aligned with the Paris climate agreement.
That on the face of it is really good but to be lobbying counter to that behind the scenes rings alarm bells because that’s not aligned with what they’ve told shareholders and the public and their customers about what they intend to do.”
Despite voluntarily committing themselves to a net zero emissions policy, the HSBC bank continues to resist any regulation of its activities in order to achieve that target.
What is extremely concerning is that as the second largest bank in Europe, HSBC has a powerful voice in the high-level expert groups, government lobbyists and advisory panels that inform policy in both the UK and Europe.
When someone lies to you its because they don’t respect you enough to be honest – and they think you’re too stupid not to know the difference.
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We leave you now with a tune from the Rolling Stones – Paint it Black
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