Our approach to net zero

Helping our clients and markets transition by 2050

The world must reach net-zero carbon emissions by 2050 to stave off the worst effects of climate change. The onus is on governments, corporations and individuals to do their part.

Why this is important to us

We believe that climate change is one of the greatest challenges facing the world today and that its impact will hit hardest in the communities and markets where we operate, namely Asia, the Middle East and Africa.

The need for a just transition to an inclusive, net-zero economy brings with it a huge opportunity for innovation and growth for our clients and our Bank.

We plan to mobilise USD300 billion in green and transition financing to help our clients reach their net zero targets

We aim to reduce absolute financed thermal coal mining emissions by 85 per cent by 2030

By the end of 2022 we expect all our clients in the Power Generation, Mining & Metals and Oil & Gas sectors to have a strategy to transition their business in line with the goals of the Paris Agreement

A word from Bill Winters

Our Group Chief Executive Bill Winters discusses why helping our clients transition to net zero is our greatest challenge yet.

Read Bill's Insights article

Our key commitments

We are committing to accelerate low carbon opportunities in the world's fast growing, most populous markets.

1

Reduce financed emissions

We aim to reduce the emissions we finance, with targets for carbon-intensive sectors and further restrictions on coal

2

Finance transition projects

We plan to mobilise USD300 billion in green and transition finance

3

Accelerate new solutions

We are deploying a Transition Acceleration Team and launching new products

Clear action plan

Achieving a just transition – one where climate objectives are met without depriving developing countries of their opportunity to grow and prosper – will require capital and specialised support.

We are uniquely placed to help by directing capital to markets that have the greatest opportunity to adopt low-carbon technology, and some of the toughest transition-financing and climate challenges.

Our net-zero approach has three aims:

Restrict financing of thermal coal mining. We aim to reduce absolute financed thermal coal mining emissions by 85% by 2030, in addition to the existing prohibition on financing new or expanding coal-fired power plants.

Reduce emissions intensity in other high-carbon sectors (excluding thermal coal). We have set interim 2030 targets for Power (-63% emissions intensity), Steel and Mining (- 33% emissions intensity respectively) and Oil and Gas (-30% emissions intensity)

Mobilise green and transition finance. We plan to mobilise USD300 billion to help emerging markets achieve net zero by 2050.

Launch and grow sustainable products, including a Universal Climate Finance Loan that incentivises clients to outpace national decarbonisation targets, green mortgages and sustainable investment offerings. We will report emissions across the portfolio, with a view of setting green mortgage targets by 2023.

Double sustainable investing assets under management. By 2025 we aim to double sustainable investing assets under management and integrate ESG considerations into our advisory activities in our wealth management business.

Deploy a new Transition Acceleration Team. The team will provide our clients in carbon-intensive sectors with deep expertise on how to accelerate their low-carbon transitions, and tools to measure their progress.

Our targets

2030 interim targets to reduce financed emissions

in Oil and Gas

We plan to reduce the economic emissions intensity of our Oil and Gas portfolio by 30%

in Metals and Mining*

We aim to reduce the economic emissions intensity of our Metals & Mining portfolio by 33%. *Excluding thermal coal mining

in Thermal Coal Mining

We aim to reduce absolute financed thermal coal mining emissions by 85%

in Power

We aim to reduce the economic emissions intensity of our Power portfolio by 63%

Read more in our whitepaper

Download the PDF

Our road to net zero

Key milestones on the journey to 2050
We published our first Sustainable Impact Report, which revealed that our Green projects helped avoid 738,998 tonnes of CO2 emissions between July 2019 and July 2020.
We announce new targets to reach net-zero carbon emissions from financed activity by 2050, including interim 2030 targets for the most carbon-intensive sectors.
By 2030 we will only provide financial services to clients who are less than 5 per cent dependent on revenue from thermal coal.
Our new Transition Finance Framework sets out how our transition finance will be governed by alignment with the NZE and a set of well-defined principles that help guide our clients onto a low-carbon pathway.
We plan to double our share of sustainable investing assets under management in our wealth management business. We will fully integrate ESG considerations into our advisory activities for third party funds and discretionary investment mandates.
We aim to meet our interim targets for Oil & Gas (-30% emissions intensity), Metals & Mining (-33% emissions intensity), Thermal Coal Mining (-85 % absolute emissions) and Power sectors (-63% emissions intensity).
We plan to reach our net-zero financed emissions goal, aligning with the Paris Agreement.

FAQs

The effects of climate change are already being felt but are expected to get worse as global temperatures rise. The Intergovernmental Panel on Climate Change (IPCC) says that effects of 2⁰C could include increased extreme drought, precipitation and flooding, increases in sea levels, as well as higher average temperatures. The IPCC has also found that economically disadvantaged populations are most at risk from the impact of these changes.

Deployed effectively, finance can help accelerate the shift to net zero technologies. In emerging markets, a significant investment gap must be closed if economies are to align with net zero: only 10-20 per cent of the USD1.8 trillion to USD3.0 trillion of capital required annually to deliver net zero by 2050 is currently flowing to Africa, Asia and the Middle East.

We define transition finance as any financial service provided to clients to support them align their business and/or operations with a 1.5⁰C trajectory. We recognise that global thinking around transition finance is still nascent and, as such, we will evolve our definition over time to ensure we remain in alignment with the latest science-based thinking on pathways to net zero by 2050.

We aim to reduce the emissions associated with our financing activities to net zero by 2050, with 2030 interim targets in our most carbon-intensive sectors. Progress won’t be linear and production of some fossil fuels may rise before it comes down in our markets, for example, gas usage may increase as it replaces more carbon-intensive alternatives such as coal in the transition phase.

We define this as a transition to net zero where climate objectives are met without depriving developing countries of their opportunity to grow and prosper. 33 of our 59 footprint markets do not at present have a commitment to reach net zero by 2050 and many are currently reliant on carbon-intensive industries for their continued economic growth. We aim to provide capital and specialised support to help these markets on a path to net zero while maximising the benefits of a just transition for people and communities.

We have drawn on the best data currently available and aligned with the International Energy Agency’s Net Zero Emissions by 2050 scenario. We are sharing our methodology transparently in a white paper to help collective learning and encourage discussion and debate. As standards and methodologies evolve, and data quality and availability improve, we will refine our emissions calculations further.

Our approach to net zero on a single page

Download our infographic

Our reports

Industries in transition

One silver lining from the pandemic has been the renewed focus on sustainability and the importance of building resilience in economies and societies.

Is investment going where it matters most?

Our latest research report, The $50 Trillion Question, seeks to find out if the world’s top investment firms are using their assets to help meet the UN’s Sustainable Development Goals

Clean Fresh Water Scarcity Symbol: Black Girl Drinking from Tap

Opportunity 2030

The private sector has a critical role to play in meeting the UN’s Sustainable Development Goals over the next decade. Our report reveals for the first time some of the major opportunities for the private sector to contribute.

Downloads

Find further information in our downloads below

This file opens in a new windowOur approach to net zero - whitepaper | pdf