UK banking giant HSBC has announced plans to form a new dedicated sustainable finance unit in response to rising client interest in the sector.
The new unit, which will sit within the bank’s global banking and markets division, aims to act as a central point of coordination and support for sustainability as it rises in importance for more clients in the future, according to HSBC.
The new London-based department will be run by Christian Déséglise, HSBC’s global head of central banks and global co-head of sovereign and public funds, and Michael Ellam, managing director of HSBC’s public sector banking team in its financial institutions group. The pair will run the unit in addition to their current roles.
“I think what we are seeing, or certainly what we anticipate, is that sustainability becomes a bigger issue for a much wider range of our corporate and financial institution clients than has been the case to date,” Ellam told reporters on Thursday. “So we want to try to anticipate that trend, and think about how we best help our clients.”
The launch of the new unit comes after a survey commissioned by HSBC found two-thirds of institutional investors want to put more capital into low carbon and climate-related investments but lack the required information on firms’ climate credentials to do so.
The survey of nearly 300 institutional investors, and almost 300 corporates found under a quarter of companies disclose their environmental impact, while just 13 per cent have sustainable financing strategies in place. But a quarter of companies that do not currently disclose their environmental impact said they plan to do so in the coming year, while half said they see their disclosure around climate risk increasing.
The launch of the unit also comes ahead of the launch next week of the recommendations of the Task Force on Climate-Related Disclosures (TFCD) fronted by former New York mayor Michael Bloomberg. The taskforce is expected to present a set of voluntary guidelines for firms to follow when reporting their climate-related financial risks.
“I think [the new sustainable finance unit] is how we are adapting and changing and developing our approach to how we support our clients,” said Ellam. “We want to be ahead of the curve on this, so we want to be able to continue to be a leading bank for supporting our clients as they manage the transition towards a low carbon economy.”