• All parties have a role to play in climate change mitigation including the banking sector
• HSBC Bank (The Hongkong and Shanghai Banking Corporation) has the highest score in climate change mitigation commitment
• One of HSBC’s commitments is shown by limiting financing to the power generation or coal mining sectors

Halo Sobat EBT Heroes. We know that Indonesia has committed to reducing greenhouse gas emissions by 31.89% with its own efforts and 43.20% with international support by 2030. Of course, this effort requires large funds. According to The Ministry of National Development Planning, Indonesia needs financing of 67,803 trillion rupiah to realize the Sustainable Development Goals.

Furthermore, Indonesia is estimated to require financing of 322.9 billion US dollars for the implementation of mitigation actions, which does not include the cost of adaptation actions and the creation of a supporting environment. With limited resources, financing certainly cannot only come from the state budget. The role of private financial institutions, including banks, is crucial to close the financing gap.  

So we can say that banks have a key role to play in climate change mitigation. Such as through energy transition financing, investment in low-carbon sectors, and financial support for green projects. However, not many banks have played this role.

Based on the assessment of commitment to climate change mitigation of 11 banks conducted by the Prakarsa Research Institute, HSBC has a score of 4 or the highest among other banks. A higher score indicates that the bank has a high commitment as well.

Are you curious how HSBC got the highest score and what HSBC has done to mitigate climate change? Check out the information below.

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HSBC Commitment Scores

Bank ratings are conducted to assess lending and investment policies on several themes and sectors, especially related to social issues, human rights, the environment, and corporate governance. Some aspects of the bank’s internal/operational policies are also assessed such as the themes of financial inclusion, taxation and corruption, and transparency and accountability.

There are three main topics on which the assessment is based, as shown below.

HSBC received 4 points on climate change which is a significant increase from the previous rating. HSBC made several policy updates to prevent climate change.

The factors that support the score increase are the implementation of international standard documents on sustainable financing. Other factors driving the score improvement are the delivery of banking emissions, sustainable lending and investment and the target to reach USD 1 trillion by 2030, and the document that states HSBC is exiting coal financing.

What HSBC Does

HSBC Bank Indonesia has demonstrated a strong commitment to reducing carbon emissions. Here are some examples of HSBC’s role in reducing carbon emissions:

• Green Financing: HSBC Indonesia has disbursed 10.3 million rupiah in green-term loans to support energy transition and sustainable business.
• Partnership with Government: HSBC Indonesia has actively participated in the Indonesian government’s efforts to reduce carbon emissions, including through supporting carbon exchanges issued by the Government.
• Support for the Electric Vehicle Sector: HSBC Indonesia has recognized the importance of supporting the electric vehicle (EV) sector as part of Indonesia’s efforts to achieve carbon-neutral emissions by 2060.
• Green Loan Initiative: HSBC Indonesia has developed a Green Loan initiative, supported by the Loan Market Association, to help companies transform their business towards sustainability.
• Support for Sustainable Finance: HSBC Indonesia continues to actively participate in promoting sustainable financing, including through support for sectors involved in climate change mitigation efforts.

Overall, HSBC Bank Indonesia has demonstrated a strong commitment to reducing carbon emissions, including through green financing support, government partnerships, support for the electric vehicle sector, Green Loan initiatives, and support for sustainable financing. This demonstrates the bank’s role in supporting sectors involved in climate change mitigation efforts.

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Hopefully, other banks will follow HSBC’s lead in actively mitigating climate change.

#zonaebt #EBTHeroes #Sebarterbarukan

Editor: Alvin Pratama

References

[1] Laporan Pemeringkatan Bank 2022

[2] Peluang Usaha Di Tengah Perubahan Menuju Emisi Rendah Karbon