Stockholm (NordSIP) – In the latest departure from the Net-Zero Banking Alliance NZBA, HSBC announced this week it would withdraw from the organisation. The announcement emphasised HSBC’s ambitions and engagements but it failed to address the contradiction between these statements and its role in funding the oil industry.
HSBC Withdraws from NZBA
HSBC’s announcement follows similar decisions by JP Morgan, Morgan Stanley, Bank of America, Citigroup, Wells Fargo and Goldman Sachs at the end of 2024 and the start of 2025 and the subsequent watering down of NZBA’s guidance, in hopes of stopping the outflow of signatories.
The announcement emphasises HSBC’s initiative in embracing the fundamental ideas of net carbon neutrality by 2050 espoused by the NZBA since before the 2021 launch of the organisation. However, the bank never describes this neutrality of emissions as a “goal”, sticking instead to the less committal “ambition”.
“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,” HSBC argues in its press release.
HSBC acknowledges the need to decrease the emissions associated with its financing operations. However, it seems to argue that the NZBA has done its job and that it is no longer necessary for HSBC to be a part of the organisation, given its credentials.
“Financed emissions targets are one mechanism that we use to track and disclose our progress towards implementing our Net Zero Transition Plan. The Net Zero Banking Alliance played a role in developing guiding frameworks to help banks establish their initial target-setting approach. 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,” HSBC argued.
“We continue to remain engaged with the Glasgow Financial Alliance for Net Zero to support the mobilisation of capital towards the net zero transition. Our approach to setting financed emissions targets will continue to be informed by the latest scientific evidence and credible industry-specific pathways. We continue to support customers in all sectors to make progress towards their individual decarbonisation plans, recognising that the transition to net zero is not linear or uniform across sectors, markets, and regions. Our strategy is to provide our customers with pragmatic financing solutions that facilitate their progress and support long-term emissions reduction while advancing energy security and meeting the economic and industrial needs of today’s economy,” HSBC adds.
The Problem with HSBC’s Methodology
The problem with HSBC’s attempt at tackling its financed emissions is that while it might look good on paper, it has a vast gap that undermines the credibility of its commitment to net-zero CO2 emissions, not just by 2050, but, really, by any time: its methodology does not include bond investments.
“Transactions excluded from the analysis are asset backed securities, mortgage-backed securities, government bonds, and bonds issued by multinational organisations as these are out of scope for the facilitated emissions analysis,” HSBC explains in its 2024 Financed Emissions Methodology Update report.
This is extremely problematic as it leaves HSBC making decarbonisation claims while facilitating financing operations for the like of Saudi Aramco. Outside observers are understandably not convinced. According to the latest Banking on Chaos report HSBC came in as the 20th largest financier of fossil fuels in 2024 globally. Focusing on European banks alone, HSBC is only behind Barclays and Santander.
In discussing the limits of voluntary commitments, Banking on Chaos notes that HSBC among other banks has backed away from some of its commitment by “tweaking policy language to say that exceptions to fossil fuel exclusions are acceptable if they’re ‘within the intention’ of the policy. These shifts are not minor edits — they weaken accountability and preserve business as usual and likely respond at least in part to ‘anti-ESG’ pressure.”
HSBC is clearly not the only large European bank with this problem. “In Europe, the UK bank Barclays is the largest fossil fuel financier in 2024 with $35.4 billion and is the only European bank in the top dozen financiers. Next, Spain’s Santander, the UK’s HSBC, Germany’s Deutsche Bank, and France’s BNP Paribas each contributed between $14 and $17.3 billion to the industry in 2024,” the 2025 Banking on Chaos report notes.
