LONDON – HSBC Holdings (NYSE: HSBC) has dropped its chief sustainability officer from its decision-making executive board, the bank confirmed on Tuesday as it released quarterly earnings, sparking concern it could become the latest bank to row back on its climate commitments.
As part of a strategic overhaul announced last week, HSBC downsized its 16-person executive committee, with Celine Herweijer, group chief sustainability officer, not named on its new 12-person operating committee, according to the bank’s statements at the time.
New Chief Executive Georges Elhedery declined to comment on the implications of Herweijer’s removal from the bank’s senior decision-making body when asked directly by Reuters on Tuesday, but said the lender “remains committed to supporting the transition to net zero”.
Elhedery’s comments on the decision came as HSBC (NYSE: HSBC) reported better-than-expected third-quarter profit and its new CEO embarks on a sweeping overhaul of the business aimed at reducing layers of management and stripping out costs.
Herweijer did not respond to a request for comment.
However, Andrew Harper, chief responsibility officer at Epworth Investment Management, a specialist investment firm serving UK charities and a shareholder in the bank, said he was concerned it could suggest a weakening of the bank’s commitments.
“Commitment without action remains cheap talk at HSBC,” he said. “Time and time again, we’ve seen the bank make bold climate claims and then water them down. Removing Celine from the operating committee is just the latest signal of the bank’s true intentions – profits at any cost.”
Climate campaigners argue having a chief sustainability officer on a company’s executive committees is essential to ensure decision-making reflects the urgency of the climate crisis and holds institutions to account on their pledges.
It is not the first time HSBC’s climate credentials have been called into question by investors. After a campaign by non-profit ShareAction and institutional investors, HSBC committed in 2022 to stop financing new oil and gas fields.
In January, HSBC (NYSE: HSBC) unveiled its first net-zero transition plan as part of its commitment to reach the target by 2050, laying out its plans to help the bank’s heaviest-emitting clients decarbonize their businesses.
Banks have pledged to spend trillions of dollars in an effort to help cap global warming but some of the biggest are saying that without clear policy direction from governments, it will be challenging to meet the goal.
Last week, Morgan Stanley, the Wall Street lender, said it had lowered its expectations for cutting emissions from its corporate lending portfolio as the world is moving too slowly to a greener economy.
(Source: Reuters)
