HSBC predicts ‘new climate agenda’ in 2014

High street bank HSBC has predicted that a combination of factors will lead to a “new climate agenda” in 2014, as its own research reveals sustainable investments outperformed last year.

The HSBC Global Climate Change benchmark, which tracks the performance of sustainable companies, delivered 19.8% in 2013, outperforming the global equities market for the first time. This suggests investment in the sector is continuing to grow.

In a statement, the bank said, “We believe 2014 will mark the beginning of a new climate agenda. The traditional narrative was that climate risks are in the future, that carbon has to be priced to be cut, and that low-carbon alternatives are high risk and speculative.

“We see three issues that give new impetus to the climate economy in the year; impacts, carbon risk and green bonds.”

The devastating Typhoon Haiyan was highlighted as evidence that the impacts of climate change were already affecting the world. The statement added that in 2014, people should expect a greater focus on the present dangers of climate vulnerability, impacts, loss and damage.

Carbon emissions also pose a risk and “inefficient sub-critical coal-fired generation must be replaced with low-carbon alternatives”, the bank added. China and the US, which account for more than 40% of global carbon pollution, are both expected to use environmental regulation to deal with emissions, particularly coal, and as a result drive change.

Despite stating the carbon cuts are needed, HSBC ranked 15 in the Banking on Coal report last year. The study looked at to what extent banks have financed coal mining projects between 2005 and 2012. HSBC was found to have loaned and unwritten a total €2.5 billion (£2 billion) in that period.

Campaign group World Development Movement (WDM) has previously urged the bank to divest from fossil fuels. The organisation warned that such investment strategies were creating a “carbon bubble”.

Over the last year, the bank has also been accused of land grabbing activities in Uganda and “bankrolling the destruction of rainforests” through loans to the palm oil industry.

HSBC scores poorly on Move Your Money’s banking scorecard, with just 18/100 overall and zero for honesty. Its unsustainable practices also means it has been shortlisted for the Public Eye Awards, for companies with the worst corporate sustainability record.

Further reading:

Gazprom and Fifa lead the way for Public Eye award on wrongdoings

Tonne of coal delivered to HSBC in protest against fossil fuel investments

HSBC considers floating UK banking business

HSBC accused of ‘bankrolling deforestation’

Campaigners urge HSBC to move away from fossil fuel investments