HSBC has announced that it has left the Net Zero Banking Alliance (NZBA) becoming the first major UK bank to do so. The NZBA, which is bank-led and UN-convened, represents major global banks committed to aligning their lending, investment, and capital market activities with net-zero greenhouse gas emissions by 2050. The Alliance, which was founded in 2021, has more than 120 members from 44 countries, collectively managing $50 trillion in assets[i].
In a press release HSBC said: “In 2020, HSBC was one of the first global banks to set a net zero by 2050 ambition. We remain resolute in this long-term ambition and in supporting our customers to finance their transition objectives. We believe supporting our customers’ transition brings benefits to their businesses, helps generate long-term financial results for our shareholders, and contributes to making the global economy more resilient”[ii].
They added that the NZBA had played a crucial role in developing guiding frameworks to help banks establish their initial target-setting approach, and: “With this foundation in place, and as we work towards updating and implementing our Net Zero Transition Plan later in 2025, we, like many of our global peers, have decided to withdraw from the NZBA. We continue to remain engaged with the Glasgow Financial Alliance for Net Zero to support the mobilisation of capital towards the net zero transition”[iii].
HSBC’s exit from the alliance follows its decision to push back its own climate targets. Announced in February, HSBC will now move its target to achieve net zero emissions in its operations and supply chain back by 20 years, to 2050 instead of 2030. In addition, the bank is reviewing its interim targets to reduce financed emissions in key carbon-intensive industries.
Commenting on HSBC’s decision to leave the NZBA, Jeanne Martin, Co-Director of Corporate Engagement at ShareAction said:
“We strongly condemn HSBC's decision to leave the NZBA, which is yet another troubling signal around the bank's commitment to addressing the climate crisis. It sends a counterproductive message to governments and companies, despite the multiplying financial risks of global heating and the heatwaves, floods, and extreme weather it will bring.
“Shareholders with £1.2 trillion in assets under management called on the bank just weeks ago to continue to reaffirm and build on its existing climate progress, rather than backtracking on ambition to protect the long-term prosperity of the economy and the livelihoods of people around the world”[iv].
HSBC’s decision follows recent changes to NZBA requirements. In April this year, NZBA members ‘overwhelmingly’ voted to drop the coalition's 1.5-degree alignment, as well as a watering down of wider climate goals.
It means that banks should now aim to limit global warming to well below 2 degrees, and instead ‘strive’ for 1.5 degrees. The previous NZBA requirements set this target as 1.5 degrees, with no mention of a 2-degree limit. The NZBA says that it acknowledges a wider range of net-zero pathways that align with the temperature goals of the Paris Agreement. They add that this increases flexibility for banks with exposures to a range of markets and sectors to manage targets and transition across their balance sheet. In addition, the changes mean that broader climate requirements have effectively been converted into non-binding “best practice” guidance.
In recent months the NZBA has been hit by a wave of departures, including all six of the largest US banks – JP Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and Goldman Sachs.
[i] Members – United Nations Environment – Finance Initiative
[ii] Statement on the Net Zero Banking Alliance | HSBC news | HSBC
[iii] Ibid
[iv] ShareAction | HSBC exits banking climate coalition – ShareAction…
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
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