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Interview: Zoë Knight (HSBC): Learning the ABC of ESG

About Zoë Knight

Zoë Knight is a Managing Director and Group Head of the HSBC Centre of Sustainable Finance. She has advised global institutional investors on equity investing and climate change for over 20 years, and authored the ‘Keeping it Cool’ Series of investor briefings on climate policy, economics and investment ideas from 2014 to 2017, when she was rated #1 investment analyst on climate change by global institutional investors.

In 2018 Zoë set up the Centre of Sustainable finance. The Centre provides thought leadership about transforming the real economy and strengthening the financial system response to climate change. Zoë joined HSBC in 2010 and since then has co-authored reports on low-carbon opportunities in bond and equity markets, as well as long-term carbon and water risks. She is a Commissioner on the Energy Transition Commission, and Members of the WEF Global Future Council on Global Public Goods in the Fourth Industrial Revolution and TCFD group on measuring implied temperature rises associated with asset ownership. In 2020, she was recognised as one of 275 Global female energy influencers by the Women’s Energy Council.

While banking is not, directly, a major contributor to climate change, the business activities that it finances can be. Zoë Knight, Managing Director and Group Head of HSBC’s Centre of Sustainable Finance, identifies how the financial sector can help customers seize the opportunities in transitioning to lower-carbon, more sustainable business models.

What key trends do you identify regarding ESG in the banking sector?

Covid-19 has been hugely influential in changing perceptions about climate change. The pandemic has been a wakeup call. It has raised awareness among our clients of the need to commit to environmental, social and governance objectives. Covid-19 has forced firms to recognize the need to build resilience into their plans to prepare for future shocks - of which the impacts of climate change will certainly be the worst. It has triggered a trend that puts sustainability at the core of our operations and, at the same time, increased demand from our clients for sustainable finance and support to transition to a zero carbon framework.

"We help customers to see sustainable goals as an opportunity, not an obligation: it’s just good business sense."

How can HSBC help customers as they transition to more sustainable business models?

If the world is to achieve net-zero carbon emissions by 2050 it has to remove 51 billion tons of carbon a year from the atmosphere. Firms are best to partner in setting targets for reduced emissions. It is crucial that business and government are aligned to a common goal. But while we believe public finance can get the ball rolling, private finance is the biggest catalyst for change. Banks partnering with their clients have a huge role to play by creating the best possible conditions for sustainable investment, particularly in emerging markets. This requires agreement on common standards; agreeing priorities to rebuild sustainably with the most economic benefits and establishing future-focused markets, such as for carbon offsets. This isn’t (just) a values-based proposition; it’s a value proposition. There is huge upside to investing in sustainable infrastructure, clean technology, and climate solutions that are the next growth sectors.

What challenges and opportunities do you identify regarding ESG?

We help customers to see sustainable goals as an opportunity, not an obligation: it’s just good business sense. To achieve our ambition of becoming a net-zero bank, we expect to provide between $750 billion and $1 trillion in finance and investment to fund transitioning to low carbon over the next decade. We are also mobilizing private finance to transform sustainable infrastructure projects into a global asset class and to create a pipeline of bankable projects through our FAST-Infra initiative. HSBC Pollination Climate Asset Management intends to establish “natural capital funds” to provide investor returns linked to the protection and enhancement of nature and biodiversity. Firms rising to the challenges are applying technology and working smarter to achieve costs savings, efficiency, attractiveness as an employer and competitiveness.


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