HSBC asset management arm to disclose carbon footprint of funds

A branch of HSBC bank is seen near Westminster Abbey, in central London March 6, 2011. REUTERS/Stefan Wermuth

LONDON (Reuters) - The fund arm of HSBC HSBA.L, Britain's biggest bank, has agreed to measure and disclose the carbon footprint of its funds on an annual basis after signing up to the Montreal Carbon Pledge.

Launched in 2014, the pledge aims to attract commitments from asset owners and managers overseeing $3 trillion (2 trillion pounds) ahead of the United Nations Climate Change Conference in Paris in December, when countries will look to agree on steps to fight climate change.

But in a speech on Friday at the United Nations Sustainable Development Summit, HSBC Chief Executive Stuart Gulliver said there was a need for a unified standard around reporting and certification to make the pledge, signed this week, effective.

“The ability to obtain the data we need to fulfil our pledge becomes a crucial part of the investment decisions we make,” he said. HSBC Global Asset Management managed $454 billion at the end of December.

“Agreements like the Montreal Pledge should encourage companies to provide the disclosure that investors need, but coordination from the public sector would provide firm momentum to an otherwise piecemeal process,” he added.

Gulliver said the ability to channel ‘green finance’ into the public and private sectors would need to be underpinned by strong capital markets, and the ‘green bond’ market, which finances low-carbon projects, needed to be scaled up.

“This will only happen if we create the right incentives and eliminate disincentives within the regulatory system,” he said.

Reporting by Simon Jessop