Post by Prema Goudar

𝗪𝗵𝗮𝘁 𝗮 𝗦𝘂𝗰𝗰𝗲𝘀𝘀𝗳𝘂𝗹 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝗔𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗟𝗼𝗼𝗸𝘀 𝗟𝗶𝗸𝗲 Across this series, I have explored HSBC's climate strategy through the lenses of governance, transition risk, financed emissions, disclosure, regulation & sustainable finance. And as this series draws to a close, one question matters more than any individual metric: 𝗪𝗵𝗮𝘁 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗺𝗮𝗸𝗲𝘀 𝗮 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝗰𝗿𝗲𝗱𝗶𝗯𝗹𝗲? Looking at HSBC's progress since 2023, four lessons stand out 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 𝗶𝘀 𝗻𝗼 𝗹𝗼𝗻𝗴𝗲𝗿 𝘁𝗵𝗲𝗼𝗿𝗲𝘁𝗶𝗰𝗮𝗹- Physical climate risk is already affecting banking. As of September 2025, 3.6% of HSBC's UK retail mortgage portfolio by value was exposed to high or very high flood risk. Operational impacts are also becoming visible. Hurricane Otis damaged HSBC branches in Mexico during 2023, while Storm Alfred in Australia led to precautionary branch closures in 2025. Climate risk is no longer confined to scenario analysis, It is becoming part of day-to-day banking. 𝗔𝗱𝗮𝗽𝘁𝗮𝘁𝗶𝗼𝗻 𝗱𝗲𝘀𝗲𝗿𝘃𝗲𝘀 𝗺𝗼𝗿𝗲 𝗮𝘁𝘁𝗲𝗻𝘁𝗶𝗼𝗻:  HSBC has supported adaptation initiatives, from climate resilience programmes with BRAC in Bangladesh to €506 million in climate resilience financing across eight West African countries through MIGA and the World Bank. However, adaptation finance is still not reported separately within HSBC's sustainable finance disclosures. As climate impacts intensify, understanding how much finance is directed towards adaptation will become increasingly important 𝗧𝗵𝗲 𝗻𝗲𝘅𝘁 𝗰𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲 𝗶𝘀 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗶𝗻𝘁𝗲𝗴𝗿𝗮𝘁𝗶𝗼𝗻: HSBC identifies climate change as a Principal Risk in its 2025 Annual Report. Yet management concluded that climate risk did not have a material impact on key accounting judgements and estimates in the short to medium term. That gap is becoming the next frontier of climate accountability. Regulators, investors and standard setters are increasingly asking not only what banks disclose, but whether those risks are reflected in loan valuations, provisions and financial statements 𝗖𝗿𝗲𝗱𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝗰𝗼𝗺𝗲𝘀 𝗳𝗿𝗼𝗺 𝗰𝗼𝗻𝘀𝗶𝘀𝘁𝗲𝗻𝗰𝘆: Over the past two years, HSBC has strengthened governance, expanded sustainable finance, enhanced climate risk management and increased transparency around its methodologies. But a successful climate strategy is measured by consistency Governance, capital allocation, financial reporting and long-term commitments must continue moving in the same direction, even as markets, regulation and economic conditions evolve. 𝗟𝗼𝗼𝗸𝗶𝗻𝗴 𝗮𝗵𝗲𝗮𝗱 This series has shown that evaluating a climate strategy is rarely about finding simple answers. It is about understanding how governance, risk management, finance and regulation come together to support long-term resilience #QUBMScBlogger #ClimateRisk #GreenBanking #NetZeroFinance