London — Global bank HSBC has announced plans to prioritise financing and investment that supports a transition to a net-zero emissions global economy, it said Oct. 9.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
The bank is committing to align its financed emissions -- the carbon emissions of its portfolio of customers -- to the Paris Agreement goal to reach net-zero emissions by 2050 or sooner.
"As we enter a pivotal decade of change, we have a landmark opportunity to accelerate our efforts to build a healthier, more resilient and more sustainable future," said HSBC Group CEO Noel Quinn in a statement.
"Our net-zero ambition represents a material step up in our support for customers as we collectively work towards building a thriving low-carbon economy," he said.
HSBC has both the scale and global reach to play a leading role in guiding its customers through the energy transition and helping them achieve the 2050 goal, the bank said.
It has also targeted an interim goal to reach net-zero emissions in its operations and supply chain by 2030, it said.
"The bank will increasingly prioritize financing and investment that contributes to the low carbon transition and will apply a climate lens to financing decisions," it said.
"HSBC's ambition is to support customers with between $750 billion and $1 trillion of finance and investment by 2030 to help with their transition," it said.
The bank's plan involves aligning its business activities to the goals of the Paris Agreement and a pathway to net-zero by 2050 or sooner; enhancing its support for customers in transitioning to low carbon activities; creating a $100-million venture debt fund for clean tech innovation; a $100-million philanthropic program to support and scale new solutions; and to work with peers, customers, regulators, governments and wider society to effect change across the financial system.
HSBC in 2017 committed $100 billion of sustainable finance by 2025, but recognizes that meeting the Paris goals will require "extra effort, at a faster pace," it said.
HSBC's latest announcement contributes to a shift under way in the financial markets away from emissions-intensive investments, as companies and governments seek to align with the Paris Agreement's goal to limit global warming to no more than 2 degrees Celsius above pre-industrial levels, and to aim for 1.5 C.
The trend is likely to increase constraints on the availability of finance for high-carbon projects and investments while increasing the supply of capital for sustainable projects.