HSBC delays climate target for operations and supply chain by 20 years

HSBC has postponed its target to achieve net zero emissions across its operations and supply chain by 20 years, shifting its deadline from 2030 to 2050.

The UK’s largest bank announced the change on Wednesday while publishing its annual results, stating that external factors have made it difficult to meet the original timeline. The bank cited slow progress in decarbonising its supply chain and delays in government policy as key reasons for the decision.

HSBC originally set the 2030 goal in 2020 using 2019 as a baseline year. However, the bank now expects to achieve a 40% reduction in emissions across its operations, travel, and supply chain by 2030, rather than full net zero. It had previously planned to rely on purchasing carbon credits to help meet the target but said the market for such credits remains fragmented and unregulated.

The lender also announced a review of its 2030 targets for reducing emissions linked to its financing of high-emission industries such as oil and gas, aviation, and steel. The bank said it would release the findings later this year.

HSBC’s chief executive, Georges Elhedery, defended the decision, stating that it was appropriate to reassess the firm’s net zero strategy. However, when asked whether HSBC would leave the Net Zero Banking Alliance – amid recent exits by US banks – Elhedery declined to comment.

In its annual report, HSBC said its ability to finance customers’ transition to lower emissions depends on broader developments, including technological advances and government action. The bank stated that progress in these areas has been slower than anticipated, affecting its ability to meet its targets.

HSBC maintains that it remains committed to its 2050 net zero goal and will provide further updates on its climate strategy later in the year.