Our Net Zero Transition Plan

At a glance

In October 2020 we set our ambition to become a net zero bank by 2050. Our first Net Zero Transition Plan provides an overview of our approach to net zero and the actions we are taking to help meet our ambition. It sets out:

  1. Our vision and strategic approach – how we intend to use our strengths to make financing, facilitation and investment choices that can have a meaningful impact on decarbonisation in the real economy.

  2. Our approach to sector transitions – we look at the expected transition in key economic sectors and how we intend to use sector pathways to engage with clients on the future of their industries and their financing needs. We also describe our approach to setting and evolving our sectoral financed emissions targets and making progress towards them.

  3. Our implementation plan – how we are transforming HSBC, including how we support our clients and customers, embed net zero into our business, and partner for systemic change.

Our first Net Zero Transition Plan is an important milestone in the journey to achieving our net zero ambition.

Ambition to be a net zero bank by 2050, including in our portfolio of financed emissions

Set on-balance sheet financed emissions targets to 2030 for key carbon intensive sectors

Aim to provide $750 billion – $1 trillion in sustainable finance and investment by 2030

<p class="stand-first">&ldquo;As one of the world&rsquo;s largest international banks, HSBC is well placed to help support and finance the economic transformation required to reach net zero.&rdquo;</p> <p><strong>Noel Quinn</strong>, Group Chief Executive, HSBC</p>

Our approach to net zero

In 2020 we set an ambition to align our financing portfolio to net zero by 2050 and to achieve net zero in our operations and supply chain by 2030.

Our Net Zero Transition Plan brings together, for the first time, the steps we intend to take to deliver this. We also want to demonstrate how we intend to harness our strengths and capabilities in the areas where we believe we can best support large-scale emissions reductions.

Our motivation to act

  1. To seize the significant economic opportunity that exists in financing the investment needs of our clients and customers in the transition, while helping them to prosper.
  2. To help mitigate the rising financial and wider societal risks associated with failing to achieve the required transition across industries and geographies.
  3. To help shape (not just follow) the understanding, policies, market structures and standards necessary to achieve a just transition while maintaining sound economies.

Our role in the transition

Our starting point in the transition to net zero is one of a heavy financed emissions footprint. We will have a complex transition, with markets and sectors at different starting points and moving at different speeds. However, it also provides us with an opportunity to work with our clients and customers to help make an impact – in both the emissions challenge and the financing challenge.

We want to make financing choices that can lead to a meaningful impact on emissions reduction in the real economy, not just in our portfolio. Achieving this requires engagement with our clients and customers on their transitions to help finance decarbonisation in the sectors and regions with the most change ahead.

As we’ve supported much of the world’s industrial base for more than 155 years, we can play a prominent role in this transition.

We believe we can do this best by promoting change in three key areas that play to our strengths as an organisation and can help deliver a broader impact on decarbonisation in the real economy: transitioning industry, catalysing the new economy, and decarbonising trade and global supply chains.

<p class="stand-first">&ldquo;We are present in the regions, the markets and the sectors that arguably make the biggest impact in terms of future emissions. We have an opportunity to support them to make the transition and catalyse the new economy, following the science and leveraging our entrepreneurial spirit.&rdquo;</p> <p><strong>Celine Herweijer</strong>, Group Chief Sustainability Officer, HSBC</p>

Critical to our approach is a recognition that as a bank we cannot do this alone. Our ability to transition relies on decarbonisation in the real economy – both the supply and demand side – happening at the necessary pace.

Our clients and customers, and the industries and markets we serve will need to transition effectively, supported by strong government policies and regulation, and substantially scaled investment. Engagement and collaboration are therefore key to how we respond.

Our net zero principles

Science-based, transparent and accountable

Integrating nature

Just and inclusive

Our approach to sector transitions

In our Net Zero Transition Plan, we have set out the key changes that, based on our current understanding, are required for the transition to net zero in key sectors of the global economy.

We expect to regularly review our sector portfolio progress against progress in the real economy, and to iterate and mature our approach to supporting sector transitions over time. As part of this, we expect to continue to review our approach to financed emissions analysis, targets, and portfolio alignment, as well as supporting clients and customers with transition plan engagement, innovating on transition solutions, and working with wider stakeholders to help support systemic change.

Our approach to implementation

To deliver on our ambition to be net zero by 2050 and have a meaningful impact in the real economy, we are setting out our implementation plan to embed net zero across key areas of our business.

Supporting our customers

Embedding net zero into the way we operate

Partnering for systemic change

Embedding net zero across our business covers areas including the products and services we provide, managing risk, using policies to drive change, our governance and incentives, our culture and capabilities and how we measure progress.

Understanding our transition plan

Our initial transition plan provides an overview of the progress we have made to date and what we plan to do next. We know there is still much more to do. We’re focusing our efforts on where we can help drive material and implementable change, and applying learnings as we work to embed net zero across HSBC.

The most significant challenge in developing a transition plan at this early stage is the relative novelty of the process and the uncertainty in many areas we are seeking to address. The only certainty is that these and other developing areas will unfold in ways that we cannot accurately forecast today.

As a result, the ambition and details around implementation in this transition plan will need to evolve over time.

Rather than wait for these areas to become clear we have chosen to lay out and pursue the plans we have today, based on currently available data, infrastructure, resources, technologies and standards.

Our transition plan will form the basis of further work on our journey to net zero over time, and we expect to review and update it periodically.