Awkward questions in Canary Wharf as HSBC accused of pumping ‘sustainable bonds’ into fossil fuels
HSBC has allegedly pumped billions of dollars into fossil fuels, deforestation and air travel and labelled it “sustainable finance”.
A new investigation investigation by the Bureau of Investigative Journalism and the BBC has suggested that at least $2.4bn of deals that the bank counts towards its sustainability goals were actually contributing to climate change.
HSBC has committed to contribute up to $1 trillion in sustainable finance and investment by 2030.
The investigation cites sustainability-linked bond (SLB) as a key issue. SLBs are a “green type of debt”, designed for companies to raise money to fund their transition to more sustainable activities and give more flexibility on how money is used.
“But these targets are often remarkably weak and the penalties for failing to meet them can be paltry – leaving SLBs as a way for companies to give the appearance of environmental concern while continuing to worsen the climate crisis,” they said.
For instance, the bureau and BBC said HSBC was financing a business which does most of its work fossil fuels and petrochemicals, including construction of an African oil pipeline.
Earlier this month, the bank was under the spotlight after the advertising regulator banned one of its climate change ads.
The watchdog said HSBC was misleading customers about it own contribution to the climate crisis.
A spokesperson for HSBC told the Bureau of Investigative Journalism: “Like many other financial institutions, HSBC is playing an important role in the nascent SLB market.”
The bank said it expects standards to evolve as the market matures and it will continue to work with industry bodies, regulators and peers to help SLBs drive and incentivise robust science-based decarbonisation.
“In structuring bonds, banks like HSBC follow an industry standard … and bonds are subject to independent review and validation, enabling businesses to be transparent about climate or social impact targets while incentivising progress,” the UK’s biggest bank added.