HSBC has announced that it intends to target net zero emissions for its oil, gas, power and utilities sector portfolios.

HSBC says interim targets it is publishing for reductions in financed emissions in these sectors are a step in HSBC’s ambition to become a net zero bank by 2050 or sooner. The targets are aligned to the pathway set out by the International Energy Agency (IEA) ‘net zero emissions by 2050’ scenario, calculated to limit global warming to within 1.5°C.

HSBC is targeting a reduction of 34% in absolute on-balance sheet financed emissions by 2030 for the oil and gas sector. The bank’s on-balance sheet financed emissions for oil and gas in 2019 were 35.8 million tonnes of carbon dioxide equivalent (‘Mt CO2e’). This target is equal to the percent reduction that the IEA indicates in its scenario for global sector emissions to 2030 from a 2019 baseline.

HSBC’s methodology is aligned with the Net Zero Banking Alliance and the Financial Services Task Force. For the oil and gas sector, HSBC has focused on upstream companies and integrated or diversified energy companies. For the power and utilities sector, HSBC is targeting on-balance sheet financed emissions intensity of 0.14 million tonnes of carbon dioxide equivalent per terawatt hour (‘Mt CO2e/TWh’) by 2030, which would constitute a 75% reduction from its 2019 baseline.

Group Chief Sustainability Officer, Dr Celine Herweijer, added: “The science is clear that global emissions must significantly reduce this decade to limit global warming to 1.5 degrees. Our interim targets for these high emissions sectors will be embedded into business decision-making. The targets are science-based and highlight to our customers the level of decarbonisation we need to see across our portfolio by 2030. Active dialogue around a company’s transition plan will now be at the centre of our engagement with customers. We want to support those who take an active role in the energy transition; this is where we can have the greatest impact in making net zero a reality.”