Fair Money & Economic Opportunity

HSBC Bank USA and its affiliates settled with federal regulators and law enforcement agencies for $601 million due to mortgage origination, servicing, and foreclosure abuses, including "robo-signing."

The Federal Reserve assessed the maximum allowable civil money penalty. Additionally, Household International, which was acquired by HSBC, settled predatory lending claims with U.S. state regulators for $484 million.

Fair Pay & Worker Respect

In 2023, the CEO's total compensation was $13.4 million, while the median employee pay was $79,400, resulting in a CEO to median employee pay ratio of approximately 168.77:1.

The company's Inclusion Index Score for 2024 was 78%.

Honest & Fair Business

HSBC Bank plc and HSBC UK Bank plc were fined £57 million (approximately $72 million) by the PRA in January 2024 for compliance issues related to depositor protection arrangements.

The company has restated comparative financial data for the year ended 31 December 2022 due to the adoption of IFRS 17 'Insurance Contracts' and also for changes in the closely correlated currency list. The audit scope covers 83% of total assets and 74% of total operating income. HSBC maintains clear, global whistleblowing policies and processes, including HSBC Confidential, with 76% of colleagues feeling able to speak up in 2023. The company requires compliance with anti-bribery and corruption laws, provides annual mandatory training to all staff, and conducts regular risk assessments. Independent third-party limited assurance reports are obtained for various ESG-related metrics, including financed emissions and greenhouse gas emissions data. All non-executive Directors who submitted themselves for election and re-election at the AGM are considered independent.

Kind to Animals

HSBC is a financial services company and does not directly engage in activities such as product manufacturing, animal testing, or animal husbandry. Therefore, KPIs related to cruelty-free certification, alternative testing methods, humane certified operations, ethical input substitution, supplier audits for animal welfare, cage-free sourcing, animal testing volume, innovation investment in animal-free technologies, and animal-free R&D collaboration are not applicable. HSBC's Asset Management launched a biodiversity-screened ETF in August 2022, which excludes companies involved in animal testing from its investment universe.

However, this is an investment product's screening criterion, not a company-wide animal testing policy for HSBC's own operations or products, thus the 'animal_testing_policy' KPI is N/A. A World Animal Protection UK study, using the 2023 Fair Finance Guide Methodology, assessed HSBC as having a 0% score for animal welfare policies. The study found that HSBC, along with other banks, financed 55 of the world's largest livestock companies with $77 billion between 2015 and 2022. The report highlighted that HSBC lacks dedicated animal welfare policies and does not mention animal welfare in any of its policies. This indicates no public position on animal welfare legislation, mapping to a score of -90 for 'public_policy_engagement'. The financing of large livestock companies, particularly given the context of 70% of 80 billion animals globally being in factory farms, suggests a lack of ethical consideration for animal agriculture practices, mapping to a score of -90 for 'animal_agriculture_ethics'. HSBC's own reports acknowledge data limitations preventing reporting financed emissions or setting targets for the agricultural sector.

No War, No Weapons

HSBC states it does not provide finance to customers who solely or primarily manufacture or sell weapons, and its policy prohibits financing and advisory services to clients involved in manufacturing, trading, purchasing, or selling weapons for military use.

The company's due diligence processes seek to determine if dual-use applications are intended for military use and exclude those applications. However, Elbit Systems, a company HSBC previously invested in and fully divested from by December 2018, supplied surveillance systems and other technology for Israel’s Separation Wall and settlements, and the U.S.-Mexico border. HSBC's Financial Crime Policy generally prohibits relationships or transactions involving sanctioned individuals, entities, or comprehensively sanctioned countries, territories, and their governments, and its Defence Equipment Policy supplements this by covering trade sanctions and arms embargoes. The HSBC Holdings Board reviews the Group’s approach to Human Rights at least once a year. HSBC's Defence Equipment Sector Policy specifies that the bank would not provide financial services to companies involved in the production or selling of cluster munitions, and it explicitly prohibits involvement with a range of weapons for military use, including lethal autonomous weapons systems. HSBC Asset Management's portfolios do not have direct exposure to weapons banned by international conventions, including cluster munitions and anti-personnel mines. While HSBC aligns with the UN Guiding Principles on Business and Human Rights, campaigners noted that its past involvement with Elbit Systems violated these principles. HSBC fully divested from Elbit Systems by December 2018.

Planet-Friendly Business

HSBC sources 75.4% of its operational electricity from renewable sources as of 2024.

The company has a net-zero target year of 2050, having pushed back an earlier 2030 target for its operations and supply chain. HSBC's 2024 Scope 1, 2, and 3 emissions (Category 1, 2, and 6) were 5.7 tonnes CO2e per FTE. The company's TCFD alignment is partial, with climate scenario analysis included. HSBC conducts good scenario analysis for 1.5°C and 2°C pathways, beginning to incorporate it into planning, with basic disclosure in its sustainability report. The UK's Advertising Standards Authority (ASA) banned two HSBC adverts for misleading environmental claims, citing the omission of material information about the bank's financing of fossil fuel projects and links to deforestation. HSBC's 2021 financial emissions for oil and gas alone were 65.3 million tonnes of CO₂. The company has provided or facilitated $352.5 billion in cumulative sustainable finance since 2020.

Respect for Cultures & Communities

HSBC Australia has two formal partnerships with indigenous community groups: the Australian Indigenous Education Foundation (AIEF) and the Yurungai Learning Centre.

In Australia, 3 employees identify as Aboriginal and/or Torres Strait Islander out of approximately 2,000 HSBC Australia employees. The company's Supplier Code of Conduct requires suppliers to apply clear and consistent grievance procedures, and HSBC Confidential offers 24/7 hotlines and a web portal in multiple languages for raising concerns. HSBC funds scholarships through AIEF to enable students from communities around Australia to attend schools and universities. In 2024, approximately $9 million in grant funding was donated to partnerships aligned with strategic focus areas, and total cash giving towards charitable programs was $94.7 million. HSBC India's Skills for Life Programme includes digitizing and translating teaching materials. The company extended its Resilient Community Environment Initiative to include the Palace Museum in Beijing's Forbidden City, renovating 2,243 square metres of green space and a 118-square-metre pond.

Safe & Smart Tech

HSBC experienced a data breach in May 2024, which involved unauthorized data use through a third-party contractor's infrastructure, exposing sensitive financial information, customer records, and proprietary banking technology.

This breach included files with 1 million lines of transaction data. In October 2018, a data breach occurred where experts criticized HSBC's authentication methods, suggesting a vulnerability to credential stuffing attacks due to reliance on passwords alone. Following this 2018 breach, HSBC enhanced its authentication process for Personal Internet Banking.

Zero Waste & Sustainable Products

HSBC reported a waste recycling rate of 50% in 2024.

The company has not incurred any waste disposal violations in the past three years. HSBC has a quantitative target to reduce plastic waste by 73 tonnes per year by phasing out single-use PVC cards by the end of 2026. This initiative is expected to achieve a 55-65% reduction in single-use plastics from the current volume of 23 million cards per year. The company uses 85% recycled plastic (rPVC) in all its debit, credit, and corporate cards. HSBC requires its suppliers to comply with its Supplier Code of Conduct, and 96.7% of approximately 10,200 contracted suppliers confirmed adherence or provided an accepted alternative by the end of 2024.