Putting Sustainability at the Heart of Global Finance DIGITAL REPORT 2021
HSBC
HSBC: Putting Sustainability at the Heart of Global Finance
2
hsbc.com
HSBC
hsbc.com
3
HSBC
4
hsbc.com
HSBC
Kelly Fisher, Head of Corporate Sustainability, HSBC Bank USA, tells us how finance can play a leading role in achieving net zero and global equity
F
Kelly Fisher, Head of Corporate Sustainability, HSBC Bank USA
rom pilot renewable energy initiatives in Asia to innovative startups addressing climate change in the UK and farmers in the Upper Mississippi River Basin adopting regenerative agriculture practices – HSBC is taking sustainability seriously. Those three examples are a snapshot of the Climate Solutions Partnership HSBC has embarked upon, backed by US$100 million of philanthropic funding over five years. HSBC has also committed to be net zero of their own operations by 2030 and of their financed emissions, which includes a US$750 billion to $1 trillion in sustainable finance and investments to help their clients transition. It’s an ambitious environmental stance, yet if any banking and financial services organisation can do it, it’s HSBC – with a global footprint spanning 64 countries and with assets of US$2,959 billion (as of 31 March 2021). HSBC has transitioned from being The World’s Local Bank to truly acting locally to benefit globally. With everything else going on in the world right now, it would be easy to do nothing, but it has been a busy 2021 so far for HSBC. In Q1 it raised a record US$68 billion through its Green, Social, Sustainability and Sustainability-linked (GSSS) bond to pay for green projects and new technology to enable and accelerate the race to zero. hsbc.com
5
HSBC
HSBC’s Operational Transformation to Digitalise the Customer Journey
At the 2021 AGM, a “HSBC has been “I AM SO GRATEFUL special resolution on around for 157 years. THAT I HAVE A JOB THAT And we connect the climate change was passed, committing to world through the EVEN WHEN I'M DOING phasing out financing power of finance. THE SMALLEST THING, of polluting industries And I think that such as coal mining that is profoundly I FEEL LIKE I'M DOING and coal-fired power. important as we SOMETHING THAT It’s more than a solid see that the world is start, fuelled by the becoming incredibly MATTERS” desire to build a interconnected in better world. In the both good ways KELLY FISHER global fight against and bad,” says Kelly, HEAD OF CORPORATE SUSTAINABILITY, climate change, HSBC speaking from her HSBC BANK USA is working with its home office in customers to support Queens, New York. their transition to lower carbon emissions. “What HSBC does best is connect the Kelly W Fisher is Head of Corporate world through trade, through finance and Sustainability, HSBC Bank USA, and it is on the ground in both developing and celebrates six years with the banking giant developed nations. And while I think finance this month, having previously worked at has been criticised – that industry has been Toyota, Goldman Sachs and Ogilvy PR. So criticised, and certainly deserves scrutiny – how have things changed during her time? there is a profoundly positive impact that 6
hsbc.com
HSBC
financing can have, particularly in some of the developing countries where we're really on the ground and helping serve people. In countries like Vietnam and Bangladesh, we have a powerful banking presence there that can change lives. So that's a little bit of what I try to capitalise on from a sustainability perspective.” Times have certainly changed in what the business world used to call Corporate Social Responsibility – an umbrella term that essentially covered any activities firms became involved in ‘doing good’. Fisher says that with some notable exceptions, many companies used CSR almost as an apology for how things were being done, giving away millions of dollars to cover up how they were operating as a business in certain countries and communities. “I think because of social media, because of consumer activism, because of investor activism, that's not permitted anymore,” she says. “What I see is the role of a corporate philanthropist as an apology or cover up is almost completely eradicated at leading companies. And now the first and foremost attention is how that company operates.” In the six years that Fisher has been at HSBC, she has seen the financial giant transition, even though HSBC was
64
Number of countries HSBC operates in
226,000 Number of HSBC employees globally
TITLE: HEAD OF CORPORATE SUSTAINABILITY COMPANY: HSBC BANK LOCATION: USA
EXECUTIVE BIO
1965
Year HSBC was founded
KELLY FISHER
As a corporate social responsibility, inclusion, and sustainability advocate, Kelly has dedicated her career to helping companies strive for responsibility, generosity and inclusion. The goal? To have a tremendous impact on communities, employees and clients, while improving corporate reputation and consumer engagement. Now Kelly is helping to embed sustainability into the work of one of the world’s leading banks with the goal of helping the company and its clients to transition to a low carbon economy.
hsbc.com
7
HSBC
“ WHAT HSBC DOES BEST IS CONNECT THE WORLD THROUGH TRADE, THROUGH FINANCE AND IT IS ON THE GROUND IN BOTH DEVELOPING AND DEVELOPED NATIONS” KELLY FISHER
HEAD OF CORPORATE SUSTAINABILITY, HSBC BANK USA
8
hsbc.com
HSBC
already one of the few banks of its size globally that was already talking about sustainability or climate change and helping clients transition. “I remember my first day I went through an orientation and they told a story about a huge client that was the leading destroyer of rainforests to make paper products,” Fisher recalls. “And we could have walked away from them and a dozen other banks would have snatched them up and started financing them exactly as-is. And instead we transitioned them. And now they're the leading FSC provider of paper goods. And that was astonishing to me that that was part of my HR process day one – not ‘here's the bathroom’ and ‘here's where your computer is’, but that story. “Now I feel like if anything, the world has changed and we have to retain that leadership role and push ourselves harder than we've ever pushed. We've always known that sustainability and sustainable finance were key to us being around for another 150 plus years. And now every other bank is saying the same.” Sustainability is a constantly evolving challenge and so even though HSBC may have been a pioneer and enjoys a leadership position right now, it has to keep developing to maintain its pole position. This is not something lost on Fisher, who agrees that a leading bank can quickly become “a laggard” if they don’t invest in their own efforts and set ambitious yet attainable goals. So right now HSBC has an aggressive net zero strategy and has hired a PhD scientist as its new Group Chief Sustainability Officer. Dr Celine Herweijer joins this month (July 2021) from PwC where she held roles including Global Climate Change Leader. Herweijer has held hsbc.com
9
HSBC
DID YOU KNOW...
KELLY FISHER – MY CAREER JOURNEY
10
“When I started out, this was an almost non-existent career. There was no logical career path to becoming a sustainability expert or a CSR expert. I was a classical ballet dancer, my whole life. And that's what brought me from the Midwest to New York City. Luckily I had a personal friend, who was a recruiter for Goldman Sachs. And luckily, because she knew me as a person instead as the professional on my resume, she twisted my arm and said ‘there's this really interesting job. I know you've been volunteering with nonprofits since you were a little kid, it's kind of doing that, but for this investment bank. Just go in and talk to them about it.’ And I never looked back. I loved it so much. I spent four years at Goldman helping to lead what I still think is one of the best of the industry volunteer programmes. I also helped do the entire internal global marketing campaign to promote that to employees. From there, I went to Toyota, and had a very different experience. Volunteering on work time was not something that was really in the culture of a Japanese-led company, and so instead I oversaw massive philanthropic programs – Toyota's incredibly generous. In the US they have a hundred-million-dollar endowed foundation. In addition, we spent 30, 40, 50 million in corporate donations. By the end, we were doing some incredibly innovative things, even around skill sharing, meaning taking the world famous Toyota production system and applying it for free to nonprofits. So the same system that made Toyota famous for building their cars effectively, efficiently without waste, very environmentally friendly, we would take and then teach to nonprofits for free.
hsbc.com
Things like people standing in line in the freezing cold for a meal for 75 minutes – our engineers would go in for three days and that line would go down to 10 minutes because they were applying Just-In-Time and all these incredible production systems. Another example was an organisation in New Orleans started rebuilding people's homes that were destroyed after Hurricane Katrina 60% faster because of spending time with Toyota engineers. That was really a light bulb moment for me, which was that the same things that make a company successful can make the world a better place if they're applied in the right way. I was hired by HSBC and this role has pulled on everything I've ever done. It's really strategic, philanthropic giving that's tied to the business. I also oversee sustainable operations and sustainable finance, and I'm helping make sure that the US achieves that net zero commitment. I really love what I do. I don't wake up and have bluebirds braid my hair and live in a cartoon fantasy world. But I am so grateful that I have a job that even when I'm doing the smallest thing, I feel like I'm doing something that matters.”
HSBC
sustainability advisory roles for the United Nations, World Economic Forum, G20, the World Bank, and the European Union. Impressive credentials indeed. “The challenge and the opportunity for HSBC is immense,” said Herweijer. “Achieving net zero means we need to see a fundamental reshaping of industries and therefore of the global economy. Getting there requires bold action, new partnerships and ways of engaging with customers and stakeholders to accelerate the new solutions the world requires.” So, the trillion-dollar question is, how exactly is HSBC planning on reaching this net zero target, and how realistic is it in
the first place? HSBC’ commitment is to make its own operations net zero by 2030. While there are hundreds of marginal gains to be had along that path covering every aspect of operations, Fisher says it fundamentally comes down to three things – with the largest being its supply
“WE ALL NEED TO REENTER THE WORLD NOT LOSING HOW IMPORTANT CLIMATE CHANGE AND EQUITY BECAME TO US DURING THE PANDEMIC” KELLY FISHER
HEAD OF CORPORATE SUSTAINABILITY, HSBC BANK USA hsbc.com
11
HSBC
chain, accounting for around 78%. Second comes the energy output of HSBC’s many buildings, and the third being travel. The COVID-19 pandemic has certainly caused a shift in business travel behaviours which could be here to stay, with no need for executives to fly around the world for face-to-face meetings that have made a successful transition to virtual. “I think it's realistic,” says Fisher. “I was on the phone with a company yesterday that had set a net zero target by 2022 and they're already there. While they're not a financial services company, they have a similar energy footprint to ours. The best advice I could give is don't set a long-term goal alone. Success is in interim micro goals. Don’t just set an aggressive goal by a certain end date, set achievable micro goals.” HSBC has been widely recognised as a leader in sustainable finance – but what has it done to deserve such praise, and what does it do that makes it stand above the efforts of its competitors? Six years ago when Fisher walked through the doors, sustainable finance meant green bonds, and that was pretty much it, but HSBC was the world leader. However, since then, its bankers have been creatively uncovering new and exciting financial products and incentives – that Fisher says are “going to change the world and get us where we need to go”. “In 2017, we did the world's first SDG bond that instead of being green proceeds, it was around equality and poverty and all these things that now everyone's talking about. It was three times over-subscribed,” Fisher explains. “Last year during the height of the pandemic, we did the world's first plastic waste reduction bond. But it's not just bonds. Being a bank with its roots in trade, we are the expert in how trade routes and supply chains work. 12
hsbc.com
HSBC
2030
HSBC has commited to be net zero of their own operations by 2030
2050
HSBC has commited to be net zero of their finance emissions by 2050
hsbc.com
13
HSBC
14
hsbc.com
HSBC
“DON’T JUST SET AN AGGRESSIVE GOAL BY A CERTAIN END DATE, SET ACHIEVABLE MICRO GOALS” KELLY FISHER
HEAD OF CORPORATE SUSTAINABILITY, HSBC BANK USA
Most companies, their “The next year or so is biggest footprint is profoundly important,” HSBC'S NET ZERO their supply chain. So agrees Fisher. “We all MISSION STATEMENT when we can apply a need to reenter the lens to it and pay your We want to do more than simply play world without losing suppliers differently to our part in the transition to a more how important climate incentivise sustainable sustainable world. This pillar of our change and equity change, that's a product strategy outlines how we will help to became to us during where impact happens lead it. We have committed to: the pandemic. If we let almost immediately.” go of these two things A great example of • Become a net-zero bank as priorities, it will have that is with the retail • Support our customers to been for nothing, what behemoth Walmart – transition to a low carbon we've all gone through. which has introduced future, especially in carbon “I think too often a finance programme challenged industries companies are devalued that peg’s a supplier’s • Accelerate new climate solutions for how profound of an financing rate to its • Inspire our customers to invest to impact they can have on sustainability standards. support positive change the world. In that way, It’s a simple yet there was a great Harvard powerful concept that Business Review quote sees more sustainable companies being from years ago that said when companies rewarded with improved HSBC financing. It’s share their expertise and their resources and a win-win for the suppliers, for Walmart, and address the spinal issues, they have a greater for the planet. potential to solve those problems than Diversity and Inclusion, Equity and governments and non-profits put together. Sustainability are never far from the lips of “So companies can't just go back to the top executives globally right now, as the Milton Friedman way of thinking where so world emerges from the grips of the COVIDlong as we are making a profit, that’s all that 19 pandemic into a physical and social matters. We have to finally own the impact environment very different from even 18 and the responsibility that we have.” short months ago. Which in a way shows how hard it is to plan for the future and take steps now that will have a meaningful impact. hsbc.com
15
HSBC Bank plc 8 Canada Square London E14 5HQ
T +44 20 7991 8888 www.hsbc.com
POWERED BY: