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pww.comHSBC Holdings plc - Shareholder-Analyst Call - SEHK:5

SEHK:5

Unknown Executive [Executives] 💬

The "Unknown Executive" in the transcript is likely Daniel Klier, Global Head of Sustainable Finance at HSBC, based on the context provided. Here is a detailed summary of what he discussed:

Introduction

  • Daniel took over the presentation from Noel Quinn and provided an overview of HSBC’s climate strategy.

Overview of Strategy

  • HSBC views climate as part of a broader ESG strategy.
  • The bank has a senior governance structure and approach to ESG, with a monthly steering committee and oversight by the board.
  • HSBC has published five ESG reports and has been upgraded by MSCI and Sustainalytics, ranking above its peer group.

Decade of Change

  • The world needs significant investment to meet the goals of the Paris Agreement and implement sustainable development goals.
  • COVID-19 has accelerated the transition, with governments and companies committing to green initiatives.
  • Investors are increasingly focusing on sustainability, with risk and return playing a crucial role in investment decisions.

HSBC’s Leadership

  • HSBC is a leader in the transition to a low-carbon economy, ranking #1 in the Green, Social, and Sustainability Bond market.
  • The bank has been innovative in launching various green financial products and has trained 28,000 colleagues in sustainability.
  • HSBC aims to reach its $100 billion financing target by the end of 2020 or early 2021.

Three-Part Strategy

  • Net Zero Bank: Aligning HSBC’s own operations and financed emissions portfolio to net zero.
  • Supporting Clients: Providing $750 billion to $1 trillion in financing and investment to help clients transition.
  • Outlook New Solutions: Investing in and scaling new climate solutions, such as nature-based solutions and sustainable infrastructure.

Achieving Net Zero

  • Aligning the entire finance emissions portfolio to net zero involves working with customers to develop their journeys to lower carbon emissions.
  • Regular and transparent TCFD disclosure will be provided.
  • HSBC will work with peers, central banks, and policymakers to create standards and avoid greenwashing.

Transition Finance

  • Transition finance includes helping clients transition their operations and supply chains, particularly in high-carbon, hard-to-abate sectors.
  • Sustainable infrastructure involves bringing renewable energy concepts to emerging markets and making hydrogen and battery storage work.
  • HSBC aims to build a leading sustainable investment business to mobilize capital and find investment sources.

Examples of Transition Finance

  • Mentioned several examples, including the Etihad Airlines transition sukuk bond, the Viking link between Denmark and the UK, and the REGIO green investment fund.

Unlocking New Climate Solutions

  • Nature-based solutions involve creating a joint venture to establish the world’s largest natural capital manager, targeting a $1 billion nature fund and a $2 billion carbon credit fund.
  • Sustainable infrastructure in emerging markets faces a significant funding gap, and HSBC is leading a coalition to create a product standard for sustainable infrastructure.

Integration and Training

  • Engaging senior executives and systematically training staff, with a formal training program run by the University of Cambridge.
  • Establishing a network of about 400 champions in commercial and global banking and markets businesses.
  • Aligning incentives and integrating climate opportunities and risks into governance and disclosure processes.

Conclusion

  • The transition to a low-carbon economy represents a significant strategic and commercial opportunity for HSBC.

  • The bank aims to achieve net zero for its financed emissions portfolio, supporting clients with $750 billion to $1 trillion in financing.

  • HSBC acknowledges the need to work with customers, regulators, policymakers, and investors to find solutions throughout the transition journey.

Richard O'Connor [Former Global Head of Investor Relations] 💬

Richard O'Connor, the Former Global Head of Investor Relations at HSBC Holdings plc, made the following statements during the shareholder/analyst call:

  1. Opening Remarks:

    • Thanked the operator and welcomed attendees, providing an overview of the call structure.
    • Introduced Noel Quinn, Group CEO, and Daniel Klier, Global Head of Sustainable Finance, who would present HSBC's updated climate policies.
    • Explained the Q&A process, including how to ask questions verbally or by email.

  2. Handover to Noel Quinn:

    • Passed the presentation over to Noel Quinn, noting that he would discuss the overall ESG strategy before Daniel Klier presented on climate aims.

  3. Q&A Session Introduction:

    • Announced the start of the Q&A session after the presentations.
    • Provided instructions for attendees to ask questions via the raise-hand functionality or by email.

  4. Reading Out Written Questions:

    • Read out the first written question from Esme van Herwijnen from EdenTree regarding HSBC’s net zero target for finance emissions and the extent of decarbonization versus offsetting emissions.
    • Read out a second question from Esme van Herwijnen regarding stopping financing heavy emitters, specifically mentioning coal.

  5. Handling Additional Questions:

    • Read out a question from Nina Roth of BMO about intermediate targets for 2030 for finance emissions.
    • Read out a follow-up question from Esme van Herwijnen about continuing to finance business-as-usual activities, including fossil fuel projects.

  6. Managing Final Questions:

    • Noted that there were two more hands raised and called for the final questions to be asked.
    • Passed over to the operator to handle the remaining questions.

  7. Closing Remarks:

    • Thanked everyone for attending and invited attendees to reach out with follow-up questions.

    • Acknowledged Noel Quinn's closing remarks and thanked everyone on behalf of HSBC.

    • Concluded the call, thanking all participants.

Noel Paul Quinn [Group CEO, Member of the Group Management Board & Executive Director] 💬

Noel Paul Quinn, the Group CEO, Member of the Group Management Board & Executive Director of HSBC Holdings plc, made several statements during the Shareholder/Analyst Call on November 8, 2020:

  1. Introduction to the Call

    • Acknowledged the attendees and expressed gratitude for their participation.
    • Mentioned that he would hand over to Daniel Klier, Global Head of Sustainable Finance, to discuss HSBC's climate aims.

  2. Overall ESG Strategy

    • Emphasized the importance of considering the long-term health of the business, particularly focusing on Environmental, Social, and Governance (ESG) strategies.
    • Highlighted that sustainability is not a new focus for HSBC and that the bank is currently ranked #1 in sustainable finance.
    • Stated that the bank needs to go further by extending its focus to cover the full scope of its business and embedding climate considerations into all parts of the organization.
    • Noted the need to build new skills, capabilities, and innovations within HSBC.

  3. Climate Ambition

    • Clarified that HSBC's climate ambition is holistic, covering the entire economy and employing the whole bank.
    • Emphasized the importance of supporting clients as they transition to more sustainable practices, rather than simply withdrawing from certain sectors.
    • Mentioned the need for balance across the bank's portfolio to achieve net-zero ambitions while supporting clients' transition journeys.

  4. Broader ESG Focus

    • Stressed that while the climate focus is essential, the bank remains committed to other aspects of ESG, such as increasing diversity and inclusiveness in the workforce and maintaining strong governance standards.

  5. Governance Commitment

    • Reaffirmed HSBC's commitment to strong governance, stating that it is the bedrock of the bank's corporate culture.
    • Acknowledged that while the bank may occasionally stumble, it is committed to maintaining strong governance and being transparent about its mistakes.

  6. Transition to Daniel Klier

    • Passed the presentation to Daniel Klier to provide an overview of HSBC's strategy.

  7. Closing Remarks

    • Assured attendees that the commitment to ESG is firm and not just the right thing to do but also a commercial opportunity.

    • Emphasized the need for the strategy to be holistic across the entire bank and for the organization to be reskilled for future industries and opportunities.

    • Mentioned the management team's commitment to focusing on this critical issue over the long term, despite the challenging environment.

    • Expressed appreciation for the attendees' time and offered to engage further with any follow-up questions.

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