HSBC

In terms of its approach towards impact management, HSBC acknowledges that its financing activities have both positive and negative impacts. It also has a gender-balanced board of directors where six out of 14 members are women. Furthermore, HSBC describes its engagement approach on sustainability themes and impact topics with clients and investees, including the approach to engagement escalation in the event that engagement is unsuccessful. The financial institution’s subsidiary, HSBC Global Asset Management publishes case studies describing where it has engaged successfully with investees on sustainability themes and impact topics. In addition, HSBC discloses a list of trade associations of which it is a member including sustainability- and non-sustainability-related organisations.

HSBC has set a target of net-zero financed emissions by 2050. It discloses the key sectors it has identified as priorities to engage with on climate change and that alignment with the Paris Agreement is one of its engagement topics. HSBC is also a member of Climate Action 100+. Furthermore, the financial institution discloses the aggregate amount and share of finance it devotes to climate solutions and specifies that its climate solutions are defined according to an internationally adopted framework. HSBC is committed to minimising its negative impacts on nature and biodiversity and discloses nature- and biodiversity-related impacts as one of its engagement topics with investees.

HSBC has a publicly available policy statement committing it to respect human rights and the ILO core labour rights. Furthermore, it has a grievance mechanism accessible to all workers, external individuals and communities to raise human rights complaints or concerns. The financial institution also discloses the proportion of its total direct operations workforce for each employee category by gender and age group. HSBC has a policy prohibiting bribery and corruption, discloses a global tax strategy and income tax payments for all its tax jurisdictions and it discloses its approach to lobbying and political engagement.

In terms of its approach to senior leadership accountability, HSBC has an opportunity to assigns responsibility for sustainability to the group’s board of directors and links the remuneration of its executive and management teams to sustainability performance criteria. HSBC also has an opportunity to reach at least 40% female representation in senior leadership positions and disclose the ratio of basic salary and remuneration of women to men in its total direct operations workforce for each employee category. Furthermore, the financial institution could disclose the actions taken to address any pay gaps. There is no evidence that HCBS publishes an overview of its engagement activities over 2021 across its financing activities.

While the financial institution has interim targets for oil and gas and power and utilities sectors, it has an opportunity to disclose an interim absolute emission reduction target which covers all its financing activities. The financial institution could also require its clients to set a 1.5°C-aligned strategy. Even though the financial institution set a time-bound target for its sustainable finance and investment, it has an opportunity to disclose time-bound targets explicitly for its climate solutions. No evidence was found regarding the financial institution’s approach to fossil fuels that spans across the fossil fuel value chain and its financing activities, such as the amount or share of finance it directs towards fuels, or its stance on financing companies with new fossil fuel projects.

HSBC has an opportunity to describe a comprehensive process for identifying its human rights risks and impacts across all its activities, especially its financing activities. To provide transparency on financial inclusivity, the financial institution has an opportunity to disclose the amount of finance directed towards, for example, women-owned businesses, small- and medium-sized enterprises (SMEs) or low-income developing countries.