Stay the course on sustainability despite policy shifts, HSBC urges firms

Straits Times

05-06-2025

HSBC's chief sustainability officer Julian Wentzel noted that rather than slowing down, Asia has accelerated in terms of its green transition efforts. ST PHOTO: JASON QUAH
SINGAPORE – Transitioning to a more sustainable future is a long-term journey, and companies in the region must stay the course despite shifting policies and sentiment, said HSBC's chief sustainability officer Julian Wentzel.
Speaking to The Straits Times, he noted that Asia is in fact accelerating its sustainability efforts, with banks like HSBC maintaining their commitment even as some US counterparts pull back.
In May, the bank launched the Future Industries Partnership – a three-year philanthropic programme to help climate-related start-ups access capital for sectors that find it harder to reduce their carbon emissions, such as chemicals, cement and mining. The aim is to help these sectors find solutions for safe, sustainable operations.
Mr Wentzel, who took up the role of HSBC chief sustainability officer in February, said: 'No matter what is happening, we're an organisation that has been in existence for 160 years, and we're thinking about the next 160 years. And that is why we remain so committed to net zero by 2050.' He added that firms should avoid being influenced by 'policy whiplash'.
'You need to hold your path. You need to sustain what you believe in. And we believe this is important for our customers, for the societies in which we operate and critical for creating wealth for our shareholders because we see a real growth opportunity.'
HSBC is doubling down on that resolve even after the US withdrew from the Paris Agreement earlier in 2025, when President Donald Trump took office.
Major banks and asset managers such as JPMorgan, Goldman Sachs and Morgan Stanley have since pulled out of net-zero initiatives such as the Net-Zero Banking Alliance, which brings together banks that want to align their lending and investing activities with net-zero emission targets.
Mr Wentzel noted that rather than slowing down, Asia has accelerated in terms of its green transition efforts. 'What I see in the Asian region is a doubling down of commitment,' he said, noting that Asean and the Middle East are important markets for the bank.
'From the perspective of growth opportunities, we're seeing a clear trend of capital moving where the climate ambition has been matched with action, and that's this region,' he added.
He added that globally, although there might be backlash against sustainability, companies are also still committed to the cause.
'There might be a level of 'greenhushing' to a degree, but I haven't seen a massive change in momentum behind what banks are doing in the US, or how companies are behaving,' he said.
He was referring to the practice of companies under-reporting or withholding information on their sustainability targets and achievements, because they are afraid of backlash from stakeholders, for instance.
'I think most companies acknowledge that the problem exists and will persist, and they have an accountability and responsibility to their shareholders to sustain the path.'
He added that companies also understand that if they lose momentum and fall behind in the transition, the consequences are acute.
For example, he cited the fires in California and hurricane damage in Florida, all of which have driven up the cost of insurance and affected housing prices.
'Because that is real and tangible, even in the US, I think that keeps people highly focused on the challenge ahead, and the requirement, therefore, to sustain the path and the transition,' Mr Wentzel said. He added that markets like Singapore have an important part to play as a hub that mobilises capital, allows for the creation of new ideas and then transmits that to the rest of the region.
Mr Wentzel, who was in Singapore in May for Temasek's annual sustainability event Ecosperity Week, said: 'I think Singapore is showing huge strides in shaping industry standards.
'It's also a great hub for catalysing capital, and promoting an early coal phase-out... So I think what Singapore is doing is creating the opportunity and the facilitation of capital flows.'
HSBC has a target of providing and facilitating between US$750 billion (S$964 billion) and US$1 trillion of sustainable finance and investment by 2030. It has hit around US$400 billion as at end-2024.
When asked if a larger proportion of the bank's financing will be allocated to sustainable projects going forward, Mr Wentzel said: 'We're going to move to a world where the definition is going to change. It's not going to be about sustainable finance. It's just going to be part of the economy. It's just finance.'
He added that the bank will report on its targets but whether something counts as sustainable capital will be debatable.
'We're going to move to a world where the new energy system is going to be a sustainable system, and it will require a significant amount of capital, whether or not we then define that as sustainable capital. Ultimately the end goal is going to be that all new energy is going to be sustainable.'
The most vital issue now, he said, is that the world does not lose momentum in sustainability.
'Climate change is a global phenomenon, and it's a global system, it's not bifurcated by geopolitical lines,' he said.
'So it's really important that everybody plays their part in helping to create a clean, sustainable future for us all... It's really about sustaining the path and not allowing anything to cause us to lose momentum in what is the fight for today, tomorrow, and the future.'
Sue-Ann Tan is a business correspondent at The Straits Times covering capital markets and sustainable finance.
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