In the 60 countries where HSBC Bank does business, corporations are proactively pursuing decarbonized business models, the bank’s group chief executive said last week, because of a lesson they learned from the COVID pandemic.
HSBC CEO Noel Quinn’s remark came in a conversation between Quinn, UK climate envoy Mark Carney and Nic Gowing, the former BBC news presenter who chairs the Climate Innovation Forum. Gowing asked Quinn how corporations respond to HSBC’s urging of net-zero business models:
Gowing: “What’s it like convincing your clients in 60 countries?
Quinn: “I’m finding over the past 12-18 months that clients are actually coming for that dialogue proactively rather than us having to go to them.”
Gowing: “In every country?”
Quinn: “Yes. In any countries that I’m operating in, I’m finding that commitment from our clients to want to get on this journey. They realize that business models and technologies are going to change. If you’re in the automobile sector, your technology base will change over the next five years. If you’re in the energy sector, your technology base will change. They accept that, and their CEOs understand that.
“They need support in making that change a reality. And that’s where the finance sector should actually be on the front-front, financing that transition that needs to take place.
“I think covid has helped in that regard. Everybody in the world has had a wakeup call on how fragile the world economy is. With that wakeup call, I think the pace of change has accelerated over the past 12 months.”
According to Mark Carney—former governor of the Bank of England and Bank of Canada—climate change is now the top strategic issue in corporate boardrooms.
“This is fundamental,” said Carney, who now serves as the UK’s special envoy for climate action and finance. “And I would say for most financial companies, most financial institutions, this is now the top strategic issue. Without doubt. You see it in all the conversations.
“These are CEO conversations, they’re board conversations, they’re informed conversations, and they’re conversations that are shifting from commitment to action, from strategy to implementation of strategy. So that is a sea change from where we were even a year ago.”
Countries that have made net-zero commitments now cover 73 percent of the world’s greenhouse gas emissions, Carney said, and it makes no sense for businesses within them to sit out the massive financial flows that will fund the transition.
“If you are a company operating in those jurisdictions, the question is are you running off your business or are you managing your business to net zero?” Carney said.
“There are some big, heavy emitting industries—think steel, think cement, think manufacturing— that need capital in order to get emissions down. So net zero isn’t about withdrawing from the economy, but it’s actually more about engaging with the economy. We’re not going to shrink ourselves to net zero we’re going to invest and grow ourselves to net zero.”