HSBC Withdraws From Net-Zero Banking Alliance

HSBC confirmed its withdrawal from the Net-Zero Banking Alliance (NZBA), becoming the latest major financial institution to exit the climate coalition, following similar decisions by JPMorgan Chase, Citi, Morgan Stanley, Macquarie, and Bank of Montreal earlier this year.

HSBC stated that while it recognizes the NZBA’s role in establishing guidance frameworks for banks setting emissions reduction targets, it believes the groundwork has been laid and will instead focus on updating its own net-zero transition plan. “We remain firmly focused on helping our clients finance their transition goals and progressing toward our ambition of net-zero emissions by 2050,” an HSBC spokesperson said.

The NZBA, formed in 2021, aimed to align the banking sector with global climate goals by encouraging financing for environmentally sustainable activities and setting emissions reduction pathways linked to banking operations. HSBC’s departure follows a series of internal strategic adjustments that have raised questions about the bank’s climate commitments.

In February, HSBC abandoned its 2030 emissions reduction target, citing slow progress toward a net-zero economy. Around the same time, Julian Wentzel, Chief Sustainability Officer, HSBC, announced the bank would take a more measured approach to fossil fuel lending, a move that sparked concerns among environmental advocates.

HSBC further signaled a shift in October 2024 when it removed its sustainability heads from the executive committee, a decision explained as a governance simplification but perceived by critics as a step back from leadership on climate issues. The bank maintains its net-zero target for 2050 but has indicated an increased reliance on carbon offset mechanisms. HSBC also plans to release an updated transition strategy later this year.

Jeanne Martin, Co-Director of Corporate Engagement, ShareAction, criticized HSBC’s decision. “We strongly condemn HSBC’s decision to leave the NZBA, which is yet another troubling sign regarding the bank’s commitment to addressing the climate crisis,” she said.

HSBC’s moves have drawn concern among sustainability experts, who warn that such withdrawals can undermine corporate credibility and slow progress toward a low-carbon economy. As Martin noted, “HSBC leaves the Net-Zero Banking Alliance just when the world needs bolder action, not less.”