HSBC has followed the example of other blue chip financial institutions such as JP Morgan Chase by announcing a $100bn financing drive aimed at developing low-carbon technology and sustainable development by 2025.

The group’s head of strategy said it wanted to help make London and Hong Kong — the bank’s strongholds — the leading global centres for green finance.
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The London-based bank is simultaneously reducing its support for coal-fired power generation as well as increasing its disclosure of “climate risks” in its lending book under new policies.

FT reports that the finance announced would be aimed at projects that contributed to reducing carbon emissions or meeting the UN’s sustainable development goals, which cover a range of social and environmental challenges.

Daniel Klier, HSBC’s head of strategy, said he believed his bank’s pledge was the biggest of its kind by a European or Asian lender and would be made in the form of bond issuance, loans and investment. Also in Monday’s announcement was a commitment for all electricity used by HSBC to come from renewable sources by 2030, up from 24 per cent today.

The bank said it would achieve this via direct investment in green power projects or through power purchase agreements to help finance their development. HSBC said it would become more transparent about risks to its business — and to those of its clients — from climate change by adopting recommendations made by the Task Force on Climate-Related Financial Disclosures. That body was set up by Mark Carney, governor of the Bank of England, and Michael Bloomberg, the media owner, to establish voluntary standards for reporting financial risks created by changes to the climate. Mr Carney has warned that investors face “potentially huge” losses on fossil-fuel assets that could become “literally unburnable” as the world steps up action to reduce carbon emissions.

“We will disclose our carbon footprint and stress test our lending book against carbon pricing,” said Mr Klier, referring to the levying of charges on carbon emissions, seen as one of the main policy tools for tackling climate change.

HSBC has decided to remain open to financing coal power in Asia, as the bank has greater exposure there.

“For now, coal is such a fundamental part of power generation in many developing countries where we operate that we do not think it is the right thing, from a social or economic perspective, to withdraw,” Klier said. “What we want to do is work with clients to make sure that, when they build new plants, they are the cleanest possible and to work with investors in those markets to develop renewable resources.”