FinanceMap scores this financial institution in the following areas. Please navigate to the relevant tab for in-depth analysis
FinanceMap assesses these portfolios for this financial institution. Please navigate to the relevant tab for in-depth analysis.
HSBC has assigned climate-related responsibilities to its board, and added a new board sustainability working group in 2024 to oversee ESG and climate matters. Additionally, the organization has assigned some climate-related responsibilities to management-level committees, such as its ESG committee and Environmental Risk Steering Meeting.
HSBC has defined some climate-related risks and opportunities it considers relevant to its business, and has defined some of the processes used to determine which risks and opportunities could have a material financial impact on the organization, such as scenario analysis.
HSBC has disclosed where in its business model climate risks and opportunities are concentrated, and some plans to respond to these risks and opportunities through resource allocation such as its sustainable financing goal. The organization has not clearly disclosed how it expects its financial position to change over time due to climate change.
In 2020, HSBC conducted stress testing on six portfolios most exposed to climate risk using NFGS scenarios as well as a physical risk analysis on retail mortgage portfolio. In 2022, it conducted an analysis focused on the 11 wholesale sectors expected to be most impacted by climate risks, as well as a physical risk assessment of four of its retail mortgage markets - the UK, Hong Kong, Singapore and Australia. In 2023, HSBC analyzed its portfolio against five different scenarios in key regions, and in 2024 it disclosed impact of different scenarios over time on its wholesale lending portfolio. HSBC is using its scenario analysis for its group ICAAP and risk appetite statement, and has disclosed some strategies to manage climate risk on its wholesale portfolio as a result of its scenario analysis.
The organization uses climate scenario analysis for assessing and prioritizing risk, and enhanced its climate risk materiality assessment in 2023. It appears to have processes for identifying and assessing climate-related opportunities including client transition plan assessments.
HSBC has disclosed some of its processes for managing different climate-related risk and opportunities, including sustainability risk policies for certain sectors and examples of transition solutions. It appears to integrate climate risk into overall risk management processes across different key risks and by including climate risk in its group risk appetite statement, and has described how it integrates opportunities across its business and risk management in its transition plan.
The organization is transparent about key metrics used to measure and manage climate-related risks, including detailed sustainable finance metrics, exposure of certain portfolios to climate-related risk, and a detailed remuneration policy with measures linked to climate considerations.
The organization discloses Scope 1, Scope 2, and some relevant operational Scope 3 emissions data. It also discloses financed emissions measurements for seven sector portfolios, including oil and gas, power and utilities, iron, steel and aluminum, aviation, cement, automotive, and thermal coal mining and meets several requirements of the PCAF methodology for these measurements. HSBC discloses facilitated emissions for the oil and gas and power and utilities sectors.
In October 2020, HSBC announced its ambition to become a net-zero bank. In February 2022, HSBC outlined its first 2030 targets, setting a 34% reduction in absolute on-balance sheet financed emissions for the oil and gas sector and a 75% reduction in the on-balance sheet financed emissions intensity for the power and utilities sector. It has since added four more sector 2030 targets, for aviation, cement, automotive, and iron, steel, and aluminum, as well as a coal phaseout policy with an emissions reduction target for coal mining. In 2023, HSBC updated its targets for the oil and gas and power and utilities sectors to encompass facilitated emissions as well.
The organization's coal policies are partially aligned with IPCC guidance on the role of coal in the energy mix. HSBC has committed to phase out thermal coal mining and coal-fired power by 2030 in the EU and OECD countries, and globally by 2040. HSBC will not provide new finance or advisory services to clients with activities inconsistent with its targets and phase-out timelines, including creation of new thermal coal assets, thermal coal expansion, and new thermal coal infrastructure, and has outlined coal-related revenue thresholds and requirements for new and existing clients in the EU and OECD. HSBC has also set a financed emissions target for the thermal coal mining sector.
HSBC has set exclusionary policies for some unconventional oil and natural gas activities, including projects financing for ultra-deepwater offshore projects, shale oil projects, heavily oil projects, or projects in environmentally or socially critical areas (including the Amazon biome, Antarctic, Arctic, etc.), and will not take on new clients with more than 10% of revenue from unconventional activities.
The organization will continue to finance existing oil and gas clients on the condition that they have a credible transition plan but will not provide new finance or advisory services to clients for projects pertaining to new O&G fields where the final investment decision was taken after December 21, 2021. For prospective clients, HSBC has outlined various conditions where it will not start a new relationship based on percent of revenue from O&G exploration as well as credible transition plans. Additionally, HSBC has set an emissions reduction target for the oil and gas sector, targeting a 34% reduction in absolute emissions by 2030.
HSBC has a nuclear energy financing policy that requires projects to meet international safety standards, though it is unclear HSBC’s position on the wider role of nuclear in the energy transition. HSBC is facilitating investment in renewables through its sustainable finance goal to mobilize $750bn to $1tn of sustainable finance and investment by 2030, and has published its framework for defining eligible activities towards this goal.
FinanceMap’s Climate Governance and Policies analysis assesses statements financial institutions (FIs) are making on how they are incorporating climate issues into their decision-making and operations using FinanceMap’s matrix methodology. This methodology is adapted from the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations and guidelines, Net-Zero Banking Alliance (NZBA) or equivalent Glasgow Financial Alliance for Net-Zero (GFANZ) initiative reporting, and IPCC and IEA technology statements. The TCFD provide guidance on 11 recommendations across four areas which are reflected in our matrix: Governance, Strategy, Risk Management, and Metrics and Targets. Additional benchmarks have been introduced to strengthen the ambition of scoring criteria in the assessment of targets, which are supplemented by guidance from the NZBA or equivalent GFANZ initiatives.
Additionally, Science-Based Policy (SBP) benchmarks are used to measure alignment of an FIs technology positions with the science of climate change. These benchmarks are applied to an FIs internal policies on technologies including coal, oil, gas, nuclear, and renewables and also assesses its engagement with broader climate and energy policy issues such as advocacy on the role and importance of different strategy types in the future energy mix.
For each TCFD recommendation and technology, FIs statements are applied to a five point scoring scale ranging from +2 to -2, measuring alignment with the relevant benchmarks. The detailed scores for this FI are displayed below within each matrix cell.
The following table outlines the key queries and data sources, which FinanceMap uses to assess financial institutions climate governance, targets and policies. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portfolio Paris Alignment analysis of this institution's activities in this portfolio area assesses deals in 2020–2024.
Value Assessed: $489B
Sector Paris Alignment scores for the sectors to which this portfolio has exposure. FinanceMap Paris Alignment analysis is limited to the automotive, upstream fossil fuel, and power sectors.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portfolio Paris Alignment analysis of this institution's activities in this portfolio area assesses deals in 2020–2024.
Value Assessed: $369B
Sector Paris Alignment scores for the sectors to which this portfolio has exposure. FinanceMap Paris Alignment analysis is limited to the automotive, upstream fossil fuel, and power sectors.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portion of AUM Assessed: $136B
| Holding Name | Contribution to Sector Production |
|---|---|
| CLP Holdings Ltd | 13.8% |
| NTPC Ltd | 9.4% |
| Enel SpA | 8.2% |
| Iberdrola SA | 5.9% |
| China Resources Power Holdings Co Ltd | 4.5% |
| Engie SA | 3.2% |
| Nextera Energy Inc | 2.9% |
| Entergy Corp | 2.9% |
| Duke Energy Corp | 2.9% |
| Dominion Energy Inc | 2.6% |
| Holding Name | Contribution to Sector Production |
|---|---|
| BYD Co Ltd | 35.3% |
| Geely Automobile Holdings Ltd | 18.0% |
| Toyota Motor Corp | 7.2% |
| Stellantis NV | 6.7% |
| General Motors Co | 5.9% |
| Volkswagen AG | 3.7% |
| Ford Motor Co | 2.8% |
| Hyundai Motor Co | 2.6% |
| Honda Motor Co Ltd | 2.5% |
| Suzuki Motor Corp | 1.8% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Glencore PLC | 35.3% |
| China Shenhua Energy Co Ltd | 27.4% |
| Coal India Ltd | 11.1% |
| Yankuang Energy Group Co Ltd | 10.6% |
| China Coal Energy Co Ltd | 6.1% |
| Alamtri Resources Indonesia Tbk PT | 5.4% |
| United Tractors Tbk PT | 1.2% |
| Inner Mongolia Yitai Coal Co Ltd | 0.9% |
| Whitehaven Coal Ltd | 0.6% |
| Peabody Energy Corp | 0.5% |
| Holding Name | Contribution to Sector Production |
|---|---|
| PetroChina Co Ltd | 56.3% |
| China Petroleum & Chemical Corp | 10.5% |
| CNOOC Ltd | 6.4% |
| BP PLC | 4.6% |
| Shell PLC | 3.9% |
| Exxon Mobil Corp | 2.4% |
| TotalEnergies SE | 1.8% |
| Chevron Corp | 1.6% |
| Eni SpA | 1.2% |
| ConocoPhillips | 1.2% |
HSBC Asset Management (HSBC) appears to be actively engaging with companies around climate. It has a clear strategy for climate engagements, but only has specific engagement policies for two material climate sectors: HSBC has a high-level process to define engagement success, and has five milestones which it tracks progress on objectives against. The asset manager has a defined escalation strategy that includes voting, shareholder proposals, or meetings with the board. It has provided case studies of escalation activities, where it pressed for near-term science-based targets, co-filed shareholder proposals, and divested from a company.
The asset manager appears to be engaging with the utilities sector on climate and thermal coal, outlining expectations for companies and providing disclosure recommendations on climate transitions. HSBC appears to have engaged on climate lobbying activities, stating that it encourages companies to publish a Paris-aligned climate lobbying position, and has listed Paris-alignment of lobbying activities as an engagement objective in an engagement with an auto company. Its engagements have led to progress in company behavior on climate change, including setting 2030 GHG financed emissions targets, creating a new governance framework for financing of coal companies, and improving disclosure of climate-related lobbying activity. It is a highly active collaborative engager, leading on four engagements with CA100+ and co-leading an engagement with AGCA, and is a member of AIGCC and a lead investor for PRI Advance.
HSBC has described stewardship governance structure and processes and appears to review its policies to enable effective stewardship. It has also described how it has sought beneficiaries’ or clients’ views in its stewardship approach, including through dialogue and feedback with clients. It has limited transparency on engagements, providing high level engagement statistics and some anonymous engagement case studies, but does not disclose the names of companies it is engaging with. HSBC has disclosed all proxy voting data, but only discloses voting justifications for a few anonymous company votes. It has also disclosed how voting decisions are made on climate shareholder resolutions and guidelines for voting against directors on climate grounds.
**Shareholder Authority and Voting: HSBC has demonstrated strong use of shareholder authority, co-filing several climate-related shareholder resolutions in support of the aims of the Paris Agreement, including at an electric utility related to its GHG emissions targets and coal reliance, and a natural resources firm asking for disclosure on how its projected thermal coal production aligns with a1.5C pathway.
Insightia data suggests that HSBC has become increasingly supportive in recent years of AGM resolutions InfluenceMap categorizes as in line with the Paris Agreement, supporting 49.1% in 2019, 57.4% in 2020, 78.7% in 2021, and 71.0% in 2022.
FinanceMap's methodology to measure the engagement process on climate was developed in consultation with several of the world's leading asset managers and uses key aspects of the UK Financial Reporting Council's 2020 Stewardship Code . The Stewardship Code was chosen to benchmark engagement quality as it provides an ambitious framework and detailed definitions of what constitutes effective engagement. FinanceMap defines the term ‘engagement’ as referring to all investor actions undertaken to influence the management strategy of the companies they own including private communications with corporate management and appointed advisors; questions at AGMs/other company meetings; comments on the company in the media; escalation and the shareholder resolution process (filing, voting behavior). FinanceMap’s methodology breaks the engagement process down into a set of sub-activities and looks for evidence associated with these across publicly available data sources.
Climate-relevance categorization of shareholder resolutions is based on the IPCC’s Special Report on 1.5°C and its concluded need for “rapid and far-reaching transitions in land, energy, industry, buildings, transport, and cities.” FinanceMap scored voting on any resolution where the intent and likely outcome is consistent with this IPCC stated need. The voting data is drawn from asset managers' disclosures to the US Security Exchange Commission (SEC), asset manager websites (including third-party websites they link to), directly from the asset managers, and through specialist voting data provider Insightia. The full list of resolutions assessed is available here.
The following table outlines the key queries and data sources, which FinanceMap uses to assess asset managers' corporate engagement programs. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
Climate Lobbying Overview: HSBC appears to be actively engaging on climate-related finance policy, with mixed positions on specific policies.
Top-line Messaging on Climate-related Financial Policy: HSBC has consistently supported a role for finance in meeting the goals of the Paris Agreement and limiting global temperature rise to 1.5C, including on its corporate website and in its 2024 ESG Review. HSBC broadly supported regulation on sustainable finance in its 2023 CDP response. The bank has regularly emphasized the need for consistency in international regulation including in its 2024 ESG review and in direct communication to the UK government on its Green Finance Strategy. In 2022, at the Financial Times Moral Money Event, Global Head of HSBC Asset Management appeared to oppose the volume of climate-related finance regulation.
Position on Regulated Corporate Climate Disclosure: HSBC voiced support for regulated corporate climate disclosure including in its 2024 Net Zero Transition Plan, its 2022 TCFD report and a 2022 Just and Inclusive Transition Report. It has also supported regulatory guidance on transition plans by the UK Transition Plan Taskforce (TPT) in oral evidence to the Environmental Audit Committee in 2023 and more generally in a 2022 consultation response on the UK Green Finance Strategy. However, HSBC cautioned the UK government against taking an 'overly-prescriptive' approach to approach to the use of the Transition Plan Taskforce framework in determining the credibility of transition finance in a 2024 consultation response.
Position on Taxonomies: In a June 2022 consultation response to the UK’s Update to the Green Finance Strategy, HSBC broadly supported taxonomies, however emphasized that a taxonomy should not dominate the UK’s strategy on green finance. In its 2024 consultation response on transition finance, HSBC did not support a clear definition of ‘credible net zero transition’ or clear demarcations between green and transition finance, pushing for a market-led approach over government regulation.
Position on Climate Standards, Labels, and Benchmarks: HSBC disclosed engagement with standard setters on product labels in its 2024 Annual Report, however did not report a clear position. It strongly supported ambitious minimum criteria for the use of sustainability-linked words in financial products at an EU level, and broadly supported product categorization in its 2023 response to the review of EU Sustainable Finance Disclosure Regulation (SFDR).
Position on Incorporating Climate Factors into Investor Duties: In its 2023 response to the review of the EU SFDR, HSBC supported the removal of entity-level disclosures and supported narrowing the Principle Adverse Impact disclosure requirements for financial products.
Position on Incorporating Climate Factors into Risk Management and Prudential Regulation: In a 2022 response to the UK Green Finance Strategy, HSBC supported efforts to align prudential capital rules with net zero objectives. In its 2024 Net Zero Transition Plan HSBC reported engagement with regulators in the UK and several APAC countries on climate-related financial risk policies, including climate scenario analysis, stress testing, and prudential treatment , but not take a clear position on these policies. In its 2023 CDP Report, it supported efforts in Singapore and Malaysia to develop a climate risk management framework for financial institutions.
Position on Energy, Industry, and Land Transition: In its 2024 Strategic Report, HSBC broadly supported government policy to decarbonize the economy. In its 2024 Net Zero Transition Plan, HSBC supported the transition to a low-carbon energy sector and low-emissions technology, as well as a limited role for CCS alongside other emissions reduction mechanisms. In 2022 and 2023 HSBC reported signing on to a WEF open letter which called for policy action on the energy transition and the phasing out of fossil fuel subsidies.
Industry Association Governance: HSBC, on its website, has not disclosed its trade association memberships since 2020, despite retaining membership to industry associations engaged on climate-related policy. In its 2023 CDP response HSBC disclosed some trade association memberships but this disclosure is not comprehensive. HSBC is a member of multiple industry associations engaged on climate-related policy, including but not limited to the Institute for International Finance (IIF), AFME, the Confederation of British Industry (CBI), and the Managed Funds Association.
InfluenceMap collects and assesses evidence of corporate climate policy engagement on a weekly basis, depending on the availability of information from each specific data source (for more information see our methodology). While this analysis flows through to the company’s scores each week, the summary above is updated periodically. This summary was last updated in Q1 2025.
InfluenceMap’s methodology for assessing lobbying on climate finance policy closely follows InfluenceMap’s established methodology on climate policy engagement, which is used extensively by investors, including via the Climate Action 100+ investor engagement process. Our full methodology can be found here.
Under our lobbying assessment, InfluenceMap considers engagement on all financial policies which intersect with climate issues, as well as “real economy” climate change policies.
The analysis takes into account both the engagement of the financial institution and the activities of industry associations they hold membership of. InfluenceMap’s methodology covers seven publicly available data sources, searching for evidence of engagement and corporate positioning since 2017. To determine the policy issues within the scope of the analysis, InfluenceMap breaks down policy engagement into a series of subcategories, or 'queries'. These are designed to cover high-level issues relating to the importance of sustainable finance, as well as more specific areas of sustainable finance policymaking. InfluenceMap’s research process searches for evidence of an organization's engagement with each policy issue, across each of the data sources.
The following table outlines the key queries and data sources, which InfluenceMap uses to assess financial institutions' policy engagement. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
In this section, we depict graphically the relationships the corporation has with trade associations, federations, advocacy groups and other third parties who may be acting on their behalf to influence climate change policy. Each of the columns above represents one relationship the corporation appears to have with such a third party.
In these columns, the top, dark section represents the strength of the relationship the corporation has with the influencer. For example if a corporation's senior executive also held a key role in the trade association, we would deem this to be a strong relationship and it would be on the far left of the chart above, with the weaker ones to the right. Click on these grey shaded upper sections for details of these relationships. The middle section contains a link to the organization score details of the influencer concerned, so you can see the details of its climate change policy influence. Click on the middle sections for for details of the trade associations. The lower section contains the organization score of that influencer, the lower the more negatively it is influencing climate policy.
