Investors Managing $400 Billion Seek FRC Review of HSBC’s Climate Disclosures
Investors managing $400 billion have asked the UK Financial Reporting Council to review HSBC’s climate disclosures as near-term risk estimates appear overly optimistic. The request follows HSBC’s move to ease carbon targets, increase oil and gas financing and report no material climate impact through 2028.
1. Investor Call for Regulatory Review
A coalition of institutional investors overseeing $400 billion has formally urged the UK Financial Reporting Council to examine HSBC’s climate-related accounting practices. Signatories argue that the bank’s near-term risk estimates are excessively optimistic and could mislead creditors and shareholders.
2. HSBC’s Climate Risk Assessment
In its 2025 annual report, HSBC stated that management found no material impact from physical or transition climate risks through 2028. The bank emphasized that while climate change presents uncertainty, it does not affect critical judgments and estimates in the short to medium term.
3. Carbon Targets and Fossil Financing
Last November, HSBC scaled back its carbon-cutting ambitions and announced plans to increase absolute financing of oil and gas projects to support sectors such as data centers. The bank’s chief sustainability officer highlighted that fossil fuel lending will represent a smaller share of total energy-sector capital.
4. FRC Process and Next Steps
The UK Financial Reporting Council has received the investors’ letter and will determine whether to initiate a formal review. HSBC is preparing its response and may provide supplementary disclosures to address concerns over climate risk transparency.