HSBC has disclosed its off-balance sheet emissions – or facilitated emissions – in its latest annual report.
The bank will now report emissions linked to capital raises on which it advises fossil fuel companies.
While banks typically include client emissions based on their lending, they don’t report emissions linked to capital market transactions where a bank helps to raise funding by arranging share or bond issues.
Last year, the Partnership for Carbon Accounting financials asked banks to disclose 33% of greenhouse gas emissions associated with bond and equities.
The move follows investors pressuring HSBC to report its off-balance sheet emissions, as reported by the Financial Times.
HSBC highlighted that its facilitated emissions added up to 17.5 Mt CO2e in 2021 and 14.4 Mt CO2e in 2022 for the oil and gas sector.
For power and utilities, facilitated emissions equated to 398.3 tCO2e/GWh for 2021 and 377.6 tCO2e/GWh in 2022.
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ShareAction head of banking programme Jeanne Martin said that the responsible investment charity “welcomes” HSBC’s decision to report on emissions that come from helping its clients raise funding through bonds or share issues.
Martin noted that only reporting 33% of emissions is a “missed opportunity”.
“The bank needs to set ambitious targets and stick to them to prevent catastrophic global warming that puts people and planet at risk,” Martin added.
The bank has a target to reduce its absolute emissions for both on-balance and off-balance sheet emissions for oil and gas clients by 34% by the end of the decade.
