Interview: Niccolo Polli (HSBC Luxembourg): ESG Financial Square initiative

About Niccolo Polli

Banking CEO with substantial work experience across the Americas and Europe and with connectivity to China. Experienced in commercial and retail banking including transactional banking, security services, private banking and asset management. Thrives in complex, challenging and uncertain situations and working in multi-cultural and international environments. Holds an MBA from INSEAD, and a BSc from Stanford.


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HSBC Group has announced its ambitious plan to help build a net zero global economy, and committed financing and investment to help create a sustainable future for businesses and society. Our climate plan has three elements:

  • Achieve net zero in HSBC’s operations and supply chain by 2030 or sooner;

  • Dedicate $750bn - $1trn of finance and investment by 2030 to help customers transition;

  • Unlock next-generation climate solutions

Additionally, last year, the Group was named the World’s Best Bank for Sustainable Finance by Euromoney for the second consecutive time and this year HSBC has committed to phase out the financing of coal by 2030 for EU and OECD countries and by 2040 for the rest of the World.


Locally in Luxembourg, the bank has set itself analogous goals and trained a team of ESG Ambassadors to help achieve these. The bank is also sponsoring the “ESG Financial Square” initiative which aims to be a one-stop guide to the World of ESG and sustainability in Luxembourg, increasing awareness on this important topic. Niccolo Polli, CEO HSBC Luxembourg, tells us more.


I felt a responsibility as both a parent and a CEO of a bank to ensure we “build back greener” and not simply revert to previous habits by default.

What motivated you to sponsor the “ESG Financial Square” initiative?


I have three young children and during lockdown last year, I became their sports teacher. We would go out for long bike rides around Luxembourg and it brought us much closer to nature. It was incredible to see, feel and hear how nature flourished the instant humanity took a collective pause.


It was then that I realised that we can do this: collectively we can stem climate change and really make a difference. I also realised it will not be easy to sustain this level of impact once the impetus of COVID is removed. Speaking with colleagues, many had similar moments of awakening and a shared ambition emerged within our management team to really make a difference.


We agreed to act on several levels: increase awareness of the issues and the solutions; make specific commitments for HSBC Luxembourg; develop and deploy client solutions to help them transition to a net-zero carbon future; track progress. Sponsoring ESG Square fits into the category of raising awareness of the issues, actors and solutions.


Climate change is going to be a defining topic in the decades to come and we will be remembered for our actions, or indeed inactions, to help mitigate the impact.


What can people expect from this initiative?


There is so much happening in the world of sustainable finance and ESG that it’s not always easy to keep up and understand what is going on and what really matters.

This is where ESG Square comes into play, by aiming to be a one-stop guide to the World of ESG and sustainability in Luxembourg; providing structure, removing the noise and focussing on the key issues and developments that matter. ESG Square looks at the key players and will provide relevant content on:

· Who is doing what and how does it fit into the Luxembourg ecosystem

· Which commitments have been made by whom

· New initiatives on the horizon

· Real world solutions that people or companies can consider

· Thought-provoking analysis and opinion pieces


What is HSBC Luxembourg committing to?


I feel a responsibility both as a parent and a CEO of a bank to ensure we “build back better” and not simply revert to previous habits by default. As an individual, I have calculated my own carbon footprint and committed to take actions to reduce it. As CEO locally, I am in a privileged position to amplify my impact by integrating ESG considerations into all facets of our business, including capital allocation decisions to favour more carbon neutral activities.


As a management team, we agreed to work on three levels:

Footprint: reduce HSBC’s carbon footprint (including suppliers) to net zero by 2030 and encourage employees to know their own footprint and make commitments to reduce it as well


Clients: provide solutions for corporate customers wanting to transition away from carbon intensive activities, and individual clients wishing to align their investments with the impact they want to achieve. We have not yet established hard targets, but plan on doing so later this year


Education: increase awareness not only of the issues, but also the solutions, through regular training, analysis, communication and best practice sharing.


What is your key message for our readers?


First, that being sustainable is good business. Doing things sustainably and considering the environmental impact is not in opposition to running a commercially viable business. To the contrary, it is becoming mainstream and in many cases the more profitable option:

· HSBC’s Navigator survey* shows that 86% of companies expect their sales to grow over the next year from a greater focus on sustainability

· The S&P 500 ESG index has outperformed the S&P 500 index over the last 3 years

· Many companies that have invested in a sustained manner over time in greener alternatives (e.g. Iberdrola or Tesla), have outperformed peers with less sustainable profiles;

· Global sustainable funds recorded c$50bn of inflows during Q1 2020 while the broader market saw c$390bn of outflows


Second, that together we can succeed. We need to work collectively in a positive manner and just get on with it, for our children, our well-being, our employees and our shareholders. So I hope many of your readers will join us in the metaphorical “ESG Square” and share their stories and their solutions; be informed and inform; be inspired and inspire. Together we will succeed.


www.esgsquare.com

niccolo.polli@hsbc.com


* Annual survey of over 10,000 businesses spanning 39 countries, markets and territories.