Susustainability Leader Exits HSBC Amid ESG Policy Review
Sustainability Leader at HSBC Asset Management to Depart Amidst Sector Shift Focusing on Environmental, Social, and Governance Matters
In a shake-up at HSBC, the top sustainability executive for its Asset Management division, Erin Leonard, has announced her departure from the firm. This follows the exit of Celine Herweijer, the bank's former chief sustainability officer, at the end of last year.
Leonard, who oversaw diversity, equity, and inclusion initiatives and sustainable investing efforts, will leave after Georges Elhedery, HSBC's newly appointed CEO, initiated a review of the lender's environmental, social, and governance (ESG) policies.
Elhedery, who took the helm in September 2024, has unveiled ambitious cost-cutting plans, aiming to shave $300m off senior management layers and reshuffle the bank's geographical setup into "Eastern markets" and "Western markets."
Industry-wide Retreat from ESG Policies
The move comes as many lenders are stepping back from ESG commitments, after years of focus on the agenda. HSBC, for instance, delayed its climate target by 20 years, aiming to reduce emissions across its operations by 2050, rather than the initially planned 2030. The bank also plans to reassess its emission-reduction targets for financing polluting firms, with the results to be published later this year.
This shift is not unique to HSBC. Other lenders such as Barclays and Natwest have dropped their climate goals from their senior executive bonus schemes, arguing that it better reflects their long-term climate goals. Similarly, several leading US banks, including JP Morgan, Citigroup, and Bank of America, have exited the Net-Zero Banking Alliance (NZBA), created in 2021 by the UN Environment Programme finance initiative.
Shifting Political Landscape
The retreat from ESG policies is echoed by changes in climate and DEI (diversity, equity, and inclusion) rhetoric and policy from the White House since the inauguration of President Donald Trump. Trump's administration has undone many environmental regulations, suspended climate-related disclosure rules, and withdrawn from the Paris climate agreement. The President has pledged to crack down on DEI initiatives across government departments.
However, the trend towards ESG implementation varies globally, with the European Union proposing adjustments to its ESG framework and many U.S. states maintaining their commitment to ESG principles at the local level. Overall, while there has been a step back in ESG implementation in some regions, there remains a strong commitment to ESG principles in various sectors, particularly at the corporate and local government levels.
- Erin Leonard, overseeing sustainable investing efforts and diversity, equity, and inclusion initiatives, is departing from HSBC, following Georges Elhedery's review of the bank's environmental, social, and governance (ESG) policies.
- HSBC, amidst an industry-wide retreat, has delayed its climate target to 2050, originally planned for 2030, and plans to reassess its emission-reduction targets for financing polluting firms.
- Akin to HSBC, Barclays and Natwest have dropped their climate goals from senior executive bonus schemes, citing a focus on long-term climate goals.
- Several leading US banks, like JP Morgan, Citigroup, and Bank of America, have exited the Net-Zero Banking Alliance (NZBA).
- The retreat from ESG policies is mirrored by changes in climate and DEI rhetoric and policy from the White House since the inauguration of President Donald Trump, who has undone many environmental regulations and suspended climate-related disclosure rules.
- Although there has been a step back in ESG implementation in some regions, there remains a strong commitment to ESG principles in various sectors, particularly at the corporate and local government levels.
- In the business world, one of the most prominent finance executives, HSBC's Georges Elhedery, has unveiled ambitious cost-cutting plans, involving $300m from senior management layers and a reshaping of the bank's geographical setup into "Eastern markets" and "Western markets."
