HSBC has become the latest global lender to commit to a target of net zero carbon emissions by 2050 and pledged as much as $1tn of support in the next decade to help its clients become more environmentally friendly.

On Friday, Europe’s largest bank committed by 2050 or sooner to align all of its customer financing activities with the 2015 Paris agreement, whose goal is to keep the increase in global average temperature to well below 2C above pre-industrial levels. HSBC also said it aimed to be net zero in its own operations and supply chain by 2030.

“The bank will increasingly prioritise financing and investment that contributes to the low carbon transition and will apply a climate lens to financing decisions,” said Noel Quinn, chief executive.

HSBC’s pledge, which follows similar moves by Barclays and Lloyds, marks one of the strongest efforts from a major international lender so far. However, it was still criticised by some shareholders and activists for a lack of detail in the pledges, making “aims” rather than “commitments”, and for setting distant deadlines.

Critics said the Asia-focused lender continued to contribute to climate change by financing fossil fuel and other environmentally harmful projects, adding that they had hoped to see it promise to stop financing coal companies in OECD countries by 2030.

In response, HSBC reiterated at a press conference on Friday that it would not finance any new coal power stations but did not commit to divesting from companies or projects it backs at present.

“Such announcements are great to indicate the direction of travel, but there is a clear need for more substance in their implementation,” said Nina Roth, director for responsible investment at BMO Global Asset Management. 

“We still need more information on what they won’t do any more,” she added, pointing to HSBC’s coal portfolio and its large presence in Asia.

Mirza Baig, global head of governance and stewardship at Aviva Investors, said: “This is a positive step and should support the bank’s leadership ambition in sustainable finance.” He added: “The acid test will be how the bank translates this ambition into a clear road map for its lending book, with a particular focus on its evolving position on coal.”

Market Forces, an environmental campaign group, said there was “not a single concrete commitment made by HSBC” in the pledge and accused the bank of “fluffy marketing” while continuing to finance coal mining companies, such as a recent $350m credit line for Adaro Energy in Indonesia.

“This is a bank that owns stakes in companies seeking to build enough coal power plants to emit carbon emissions equivalent to 37 years of the UK’s annual emissions,” the group said in an email. “HSBC’s statement that they’ll be ‘net zero by 2050’ is like someone saying they’ll go on a diet by 2050 — they hope it sounds impressive, but it’s meaningless.”

HSBC did not respond to a request for further comment by press time.

Source: Financial Times