Dirty Clients Risk Being Dumped in HSBC’s Green Push

HSBC Holdings Plc could drop corporate clients that aren’t doing enough to improve their green credentials, the bank has warned.

Europe’s largest lender said that while it would work with customers to help them become low-carbon businesses, it would “envisage situations where HSBC reduces and ultimately ends relationships with certain clients that do not align with Paris Agreement goals,” according to a policy statement published ahead of the company’s annual shareholder meeting in May.

HSBC said it would begin this year to assess its oil and gas clients alongside power and utility customers, before extending the work to automotive, building materials and constructions companies next year. Clients that fail to meet the bank’s standard face being cut off.

This month, HSBC dodged a public spat with some investors over its climate change policy after setting out fresh commitments to wind down its support for coal, with an “emphasis on how it will support its customers on their own transition journeys.” The group is one of the world’s biggest backers of fossil fuels.

Banks last year reduced their overall financing of oil, gas and coal companies by almost 9%, according to figures published Wednesday by Rainforest Action Network. Lenders have offered more than $3.8 trillion of fossil-fuel financing since the signing of the 2015 Paris Agreement, though the non-profit said the pandemic had given lenders an opportunity to make long-lasting changes.

HSBC has pledged to achieve a net-zero carbon client portfolio by 2050 and has said it will provide as much as $1 trillion in financing over the next decade to help its clients reduce their emissions.

©2021 Bloomberg L.P.

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