HSBC is targeting 100% renewable electricity by 2030, with an intrim goal of 90% by 2025. Here, Andy Maguire, Group Chief Operating Officer, HSBC Holdings plc, shares the bank's leadership approach and its progress so far.
Why is HSBC going '100% renewable'?
“Each and every one of us has a stake in developing a sustainable economy. With 3,900 offices in 67 countries and territories worldwide, HSBC plays a key part in supporting the transition to a low carbon economy, via our own operations and by supporting clients in their transition strategies.
“While our consumption may not be as significant as that of other sectors, we support over 4,100 global banking clients and 1.7 million business customers. We believe it is important to lead by example.”
How did you decide on your 100% goal?
In 2011, we set a target to reach 25% renewable electricity by 2020, which we already increased to 40% in January 2017. The experience we have gained in the renewable electricity market means we can now make the highest level of commitment to renewable electricity: 100%. We understand that this is an ambitious goal, but it will be easier to achieve if we collaborate through initiatives like RE100 and its growing membership."
What have been your achievements so far?
“Since 2014, HSBC has been procuring its electricity through renewable power purchase agreements (PPAs), which create additional capacity in key markets. Currently, we have signed PPAs to cover 24% of our global consumption, focusing on areas where our consumption is highest, and in regions that also have high capacity factors. We are building a diversified, global portfolio of various types and sizes of renewables projects.”
What plans do you have to switch to renewable electricity in future?
“Our focus continues to be on PPAs. Something that sets us apart from many other RE100 members is that we do not consider renewables that are already included in the grid or green tariffs we were procuring as part of our baseline. We also made it our policy to not use unbundled Renewable Energy Certificates (RECs) or other instruments that do not represent a direct investment or purchase of renewable electricity.”
What challenges and opportunities are you experiencing?
“The renewable markets in the regions we have concentrated on have different levels of maturity. This brings both challenges and opportunities. We evaluated different approaches and quickly learned that structures or methodologies that worked in one country cannot always be applied to another.
“We have also rejected projects that make financial sense, but do not follow our ‘additionality’ or sustainability criteria. Having both financial and sustainability selection criteria for projects, signals to the market the importance corporates place on creating truly new capacity. This creates a higher demand for these types of projects.
“We know it will be a challenge to reach our 100% renewable target especially in markets where PPAs or similar mechanisms are not yet available. These are challenges that our clients face as well. We plan to build on our experience to drive the renewable energy market in regions where it is yet to develop, so that along with our clients, we can all support the decarbonization of our electricity supply.”
Why is RE100 an important initiative to join?
“Joining RE100 is an opportunity to actively collaborate with various players in the market. We plan on working closely with RE100, other corporates, governments and regulators to open up renewable energy markets and support the decentralization of power generation across our operational centers. This will enable HSBC and other corporates to develop PPAs globally and support the transition to a low carbon economy and 2-degree world.”
What else are you doing to drive a net-zero emissions economy?
“Going 100% renewable for our global electricity use is one of five new commitments that HSBC is making to tackle climate change and support sustainable growth in the communities it serves.
“We have also pledged to provide US$100 billion in sustainable financing and investment by 2025, discontinue the financing of new coal-fired power plants in developed markets and of thermal coal mines worldwide, adopt the recommendations of the Task Force on Climate-related Financial Disclosures to improve transparency, and lead and shape the debate around sustainable finance and investment.”
Find out more about HSBC’s sustainability goals here.