In July 2021, we signed up to the Net Zero Asset Managers initiative1 , which encourages investment firms to commit to manage assets in line with the attainment of net zero emissions by 2050. The agreement also accelerates our journey towards developing climate solutions that support the net-zero transition. Our approach is to dedicate 38 per cent of total assets under management (AUM) – across listed equities and corporate fixed-income investments – to decarbonisation. This will be achieved by reducing our portfolios’ Scope 1 and Scope 2 emissions intensity by 58 per cent by 2030.

Our net zero target setting methodology explained in three steps

This is just the latest stage of our journey. Through our involvement with Climate Action 100+ since its inception in 2017, we have been engaging with a growing number of the world’s largest corporate greenhouse-gas emitters on how to take necessary action to lower their climate impact. We were also a founding signatory to the One Planet Asset Managers initiative, established in 2019. This brings together leading sovereign wealth funds and asset managers to accelerate the integration of climate-change issues into the management of large, long-term asset pools.

In September 2022, we committed to phase out thermal-coal investments by introducing a new, formal thermal-coal policy².

Our goal is to exclude from our active funds coal-fired power and thermal-coal mining companies in EU and OECD countries by 2030, and worldwide by 2040. We will also engage more directly with company management from companies with inadequate transition plans.

1. The Net Zero Asset Managers initiative

2. HSBC Asset Management Policy on thermal coal