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When doing the right thing is commercially smart as well...
THIS year has been as turbulent as any I can remember. With so many new challenges day-to-day, it has been tempting to put long-term plans to the back of the mind.
However, we know there is an even bigger crisis waiting for us in the future. Climate change promises to be more drastic and longer-lasting than any concern we have faced this year, yet finding solutions to these challenges also presents opportunities for all of us. Greater urgency and ambition is needed now.
Last week, HSBC laid out its ambition to align its financed emissions - the carbon emitted by customers in our portfolio - to the Paris Agreement goal of net zero by 2050 or sooner.
This is a huge step for the bank, and a material step up in its support for customers as it works towards building a low-carbon economy. Our ambition is to facilitate between US$750 billion and US$1 trillion of finance and investment by 2030 to help clients with their low-carbon transition.
We know this will not be easy, but we also know our clients are increasingly keen to help make it happen. In fact, 85 per cent of the businesses we spoke to in a recent HSBC global survey see environmental sustainability as a priority. So, meeting this growing demand for sustainable financing is not just the right thing to do, it is the commercially smart thing, too.
We will be significantly expanding our portfolio of transition finance solutions to help decarbonise the most emissions-intensive sectors, while helping to ensure a just and stable transition to maintain economic stability. We will make every effort to find a suitable pathway to net zero for our customers.
We will need to focus on finding new solutions to difficult problems, develop ways to finance the management of natural environments, and invest in activities that preserve, protect and enhance nature over the long term. We aim to invest US$100 million in clean technology through our dedicated venture debt fund, and launch a philanthropic programme to donate US$100 million to help expand climate innovation.
As a bank with a strong and historical presence in Asia, we know how important this issue is to the region. Asia is where the fight against climate change will be won or lost. Home to the most vibrant economies in the world, it is where huge investments in infrastructure are needed to keep pace with growth. If this investment is not made on a sustainable basis, we will be locking in higher carbon emissions for decades to come.
Climate change is already making its presence felt here: Of the 20 global cities most vulnerable to rising sea levels, 15 are in Asia, and a greater number of severe weather events jeopardise long-term food security in some of the most populous places on Earth. Only a net-zero future can avert these dangers.
When I became chief executive at HSBC, one of my priorities was to make the bank more dynamic and more ambitious. These climate commitments are a test of that ambition.
To meet them, we will focus on what HSBC has always done best - supporting our clients, thinking about the long term, and opening up opportunities for the communities we serve. We are looking forward to the challenge.
- The writer is group chief executive of HSBC