HSBC Holdings PLC (GB:HSBA) has reportedly abandoned its plans to establish a carbon credits desk. According to Bloomberg, the bank is taking this decision amid frequent greenwashing accusations. HSBC has officially not released any statement to confirm the news.
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HSBC Holdings is among the biggest banks in Europe in terms of assets and serves around 42 million customers worldwide.
HSBC Shelves Carbon Credits Strategy
HSBC’s move to shelve its carbon credits strategy signifies that the bank has ceased its efforts to set up a specialized unit. Notably, the company had previously aimed to establish a dedicated unit for trading credits in the voluntary carbon market or for providing financial support to project developers involved in selling credits within the market.
It was not long ago when the bank ventured into the carbon market. HSBC considered entering the market at its peak, aiming to recruit talent to develop a trading portfolio. However, the voluntary carbon market contracted in 2023 over greenwashing concerns. As a result, companies looking to offset their carbon emissions had to pull back.
Interestingly, a carbon credit represents one ton of emissions that have been prevented or removed from the atmosphere. The project developers sell carbon credit by investing in green projects to reduce carbon emissions. Meanwhile, companies buy these credits to offset their emissions.
HSBC Announces Major Restructuring
HSBC’s choice to step back from carbon trading and financing came after the bank announced major job cuts, as its CEO Georges Elhedery is looking to restructure its operations. The bank appointed Elhedery, its finance head, as the CEO in September with the aim to streamline operations and reduce costs.
As part of this overhaul, HSBC intends to phase out its general manager titles for senior staff and replace them with the managing director title. The process is expected to result in the layoff of several hundred managing directors and senior bankers in the coming weeks.
Is HSBC a Good Stock to Buy?
According to TipRanks, HSBA stock has received a Moderate Buy consensus rating based on a total of nine recommendations. It includes four Buy and five Hold ratings from analysts. The HSBC share price target is 767.66p, which is 6.35% above the current trading level.
Year-to-date, HSBC’s shares have gained over 14% in trading.
