HSBC has pushed back a climate target to reduce planet-heating emissions caused by its operations and supply chain by 20 years.
Publishing its annual results, in which it confirmed a round of jobs cuts and cost-cutting plans, the UK’s largest bank announced sweeping updates to its strategy to achieve net zero emissions as a firm by 2050.
The lender set an interim goal in 2020 to achieve net zero across its own operations and supply chain by 2030, compared to where it was in 2019 as a baseline year.
But it will now aim to meet this goal by 2050.
And in a move that could prove more significant for its climate ambitions, HSBC also announced a review of its 2030 targets to reduce emissions caused by its financing of polluting firms.
The bank previously acknowledged its “heavy financed emissions footprint” and introduced sector-specific targets to cut lending to industries like oil and gas, power and utilities, cement, aviation and steel in recent years.
It expects to publish the results of the 2030 targets review later this year.
The firm is seeking to slash costs by £1.2bn by the end of 2026. It will look to reduce its global staff costs by 8 per cent, with senior managers and those in its newly merged wholesale corporate and institutional arm set to be in the line of fire.
HSBC warned that the UK head office is likely to bear the brunt of the cuts, but declined to give details on how many jobs will go, or provide a breakdown by country.
Unveiling the annual results, chief executive Georges Elhedery told reporters: “It’s completely reasonable that we take stock halfway into (our net zero reduction plan).”
As US banks pull out of the Net Zero Banking Alliance, Mr Elhedery said HSBC was still a member of the climate industry group but did not answer when questioned about whether it would leave as a result of the updates to its green plans.
In its annual report, HSBC said progress to decarbonise operations has been “good”, but this is “proving slower” across its supply chain.
It means the bank now expects to achieve a 40 per cent emissions reduction across its operations, travel and supply chain by 2030.
To meet the original target, the bank would need to rely heavily on buying carbon credits – money that goes towards decarbonisation projects such as renewable energy, reforestation, or community development initiatives.
While the global market for carbon credits is evolving, it remains fragmented and unregulated, leaving concerns over their integrity and real-world impact.
HSBC said: “As such, we have revisited our ambition, taking into account latest best practice on carbon offsets.
“We are now focused on achieving net zero in our operations, travel and supply chain by 2050.”
The lender also blamed a “lag” in government policy measures for its ambition rethink.
“As a bank, our ability to finance our customers’ transition and, in turn, progress toward and meet our targets, relies on decarbonisation solutions scaling across sectors, alongside growing demand from our customers for capital to transition their business models,” its statement read.
“We are limited by, and cannot on our own overcome, the present lag in policy measures and the overall slower pace of the transition.
“These factors put our customers’, and our own, net zero ambitions at risk.”
HSBC claimed factors “outside of our control” affect its ability to meet its 2030 financed emissions target and its overall 2050 net zero ambition, such as technological advancements, diversification of the energy mix, market demand for climate solutions, evolving customer preferences, and government leadership.
“Until the real economy makes significant progress in decarbonising, our own progress towards our 2030 targets and 2050 net zero ambition will be constrained,” it said.
The bank said the review of its financed emissions targets and associated policies will take time, but it aims to release the results in the second half of the year.
On its job cuts, Mr Elhedery said the group is “not tracking headcount reduction” and is instead focusing on lowering costs.
He stressed that the bank’s 211,300-strong global workforce will not fall by as much as 8 per cent, because many of the jobs going will be at a more senior level and therefore more highly paid.
But he added that the cuts will be “more borne by the head office in the UK”.
