HSBC Calls for Clearer Climate Plans to Help Achieve Net Zero
HSBC is one of the world's largest banks. It is asking governments to develop more accurate and clear climate plans. Many countries has already issued Nationally Determined Contributions (NDCs) to reduce emissions and achieve net zero status. But HSBC believes these plans are not clear. According to the bank without specific guidelines for different industries, businesses and financial institutions struggle to act effectively.
What Is Net Zero?
"Net zero" means reducing greenhouse gas emissions to as close to zero as possible. This is important for limiting global warming and avoiding severe climate impacts. Countries around the world have set goals to become net zero by the middle of the century. However achieving this target will be challenging. Why because every industry including energy, transportation and manufacturing must reduce their emissions.
The Problem with Current Plans
Celine Herweijer is HSBC's Group Chief Sustainability Officer. According to him while countries are setting broad goals their plans lack specifics for industries such as oil, gas, steel and aviation. This is problematic because each sector faces different challenges. For example reducing emissions in the steel industry might require the development of new technologies but the transportation sector might concentrate on electric vehicles.
Without these clear roadmaps financial institutions are not sure where to allocate funds for green projects. HSBC argues that clear plans would make it easier for banks to sponsor projects that reduce emissions in the most effective ways.
HSBC’s Own Efforts
HSBC is also aiming to reduce its own carbon footprint. The bank has created their own Net Zero Transition Plan. It is focused on some of the most polluting businesses including oil and gas, utilities and cement. HSBC has set temporary goals for reducing emissions from certain areas. The bank seeks to assist businesses in these areas in shifting to cleaner energy sources such as wind, solar and bioenergy. It is also investing in new developments such as clean hydrogen and carbon capture. These new developments would assist industries that are difficult to decarbonize such as steel and aviation.
Why It Matters
Clear and detailed climate plans that are specified for each industry are needed for achieving net zero targets. HSBC's reach for stronger rules from the government shows how important both the public and private sectors are in fighting climate change. Financial companies such as HSBC are willing to help with the transformation. But they want governments to set the stage with strong and detailed laws. Only by collaborating can we achieve a sustainable and low carbon future.
