HSBC ESG Factbook: FY20

ESG

HSBC Holdings plc

FY20 ESG factbook

31 December 2020

Opening up a world of opportunity

We have a refreshed purpose, values and ambition to support the execution of our strategy

Our purpose: Opening up a world of opportunity

Our ambition: We aim to be the preferred international financial partner for our clients

Our strategy:	Our values:
 Focus on our strengths	 We value difference
 Digitise at scale	 We succeed together
 Energise for growth	 We take responsibility
 Transition to net zero	 We get it done

ESG highlights

Sustainable financing and investment provided1

Cumulative from 2017 - 2020

$93.0bn

(Target: $100bn cumulative by 2025)

Employee advocacy

71%

of employees would recommend HSBC as a great place to work4 (2019: 66%)

CO2 emissions2 per FTE

Over 2020

1.76 tonnes

(Target: 2.0 tonnes per FTE by end-2020)

Conduct training

93.2%

of staff completed conduct training in 20205 (Target: 98% by end-2020)

Women in senior leadership3 roles

At 31 December 2020

30.3%

(Target: 30% by end-2020)

Charitable donations

Over 2020

$113m

(2019: $100m)

Please see pages 43-75 of HSBC Holdings plc's Annual Report and Accounts 2020 for our full ESG review

See page 7 for footnotes	1

Environment

Our climate ambition

We are powering new solutions to the climate crisis and supporting the transition to a low-carbon future, moving to carbon net zero ourselves and helping others to do so too. We have the ability to catalyse a resilient, vibrant future by financing the transformation of businesses and infrastructure to a low-carbon economy.

Achieving the scale of change required for the world to meet the Paris Agreement goal of net zero by 2050 will require us to go further and faster. As such, in October 2020, we set out a three-partplan to accelerate financing for the transition to net zero, underpinned by strong governance and risk management.

Our net zero ambition

• Align financed emissions to achieve net zero by 2050 or sooner
• Be net zero in our operations and supply chains by 2030 or sooner

Supporting our customers

• We aim to support our clients in the transition to a sustainable future with $750bn to $1tn of financing and investment over the next 10 years

Unlocking climate solutions and innovations

• We plan to help transform sustainable infrastructure into a global asset class, and create a pipeline of bankable projects

37.4%	100%
of our electricity consumed	of our electricity to be
in 2020 was renewable,	sourced from renewable
mainly from power	sourced by 2030
purchase agreements

3rd

Dealogic ranking6 for green, social and sustainability bonds globally in 2020

≤19.6%

2020 wholesale loan exposure to transition risk sectors

Wholesale loan exposure to transition risk sectors at 31 December 2020

		Building and		Metals and		Power and
	Automotive	construction	Chemicals	mining	Oil and gas	utilities	Total
Wholesale loan exposure
as % of total wholesale	≤3.1%	≤4.0%	≤3.4%	≤2.5%	≤3.4%	≤3.2%	≤19.6%

loans and advances to customers and banks7, 8*

*Total wholesale loans and advances to customers and banks amount to $673bn (2019: $680bn)

Next steps

We increased our disclosures under TCFD, but we recognise more work is needed as methods to measure progress evolve. HSBC will propose a special resolution on climate change at its 2021 AGM to: set, disclose and implement a strategy with short and medium term targets to align HSBC's provision of finance9 to the Paris Agreement goals; publish and implement a policy to phase out the financing9 of coal-firedpower and thermal coal mining by 2030 in markets in the EU / OECD, and by 2040 in other markets; report on progress against that strategy and policy on an annual basis, starting with the 2021 Annual Report and Accounts

For our full approach to climate, see pages 44-51 of HSBC Holdings plc's Annual Report and Accounts 2020. See also HSBC's 2020
TCFD update	2

See page 7 for footnotes

Social

We are bringing the benefits of connectivity and a global economy to more people around the world. We are opening up a world of opportunity for our colleagues by building an inclusive organisation that prioritises well-being,invests in learning and careers and prepares our colleagues for the future of work.

Customers

We create value by providing the products and services our customers need. We maintain trust by striving to protect our customers' data and information, and delivering fair outcomes for them. If things do go wrong, we aim to take action in a timely manner. Operating with high standards of conduct is central to our long- term success and underpins our ability to serve our customers.

Customer satisfaction

7 out of 8

WPB markets sustained top-3 rank and/or improved customer satisfaction

5 out of 8

CMB markets sustained top-three rank and/or improved in customer satisfaction

48

GBM's overall net promoter score, outperforming competitors' score of 39

When things go wrong

2.6

Complaints per 1,000 customers per month in large WPB markets in 2020

(2019: 3.7)

105.2k

Customer complaints resolved in CMB in 2020. (2019: 92.5k)

1,432

Customer complaints received by GBM in 2020. (2019: 1,668)

Supporting our customers

$5.5bn

Of personal lending balances under government-backed and HSBC-specificCovid-19 relief schemes at 31 December 2020

>237,000

Wholesale customers under government-backed and HSBC- specific Covid-19 relief schemes at 31 December 2020

Employees

Inclusion

Gender diversity

• We reached 30.3% women in senior leadership roles in 2020 and set ourselves a new target to achieve 35% women in senior leadership by 2025

Ethnicity campaign

• We are committing to boost the diversity of our senior leadership by doubling the number of Black employees in senior leadership roles from 0.7% in 2020 to 1.3% globally by 2025

LGBT+

• HSBC is one of only 17 Top Global Employers for LGBT+ inclusion, as recognised by Stonewall

Listening to our colleagues

2,510

Whistleblowing concerns raised (subject to investigation) in 2020

(2019: 2,808)

42%

Substantiated and partially substantiated whistleblowing cases in 202011

(2019: 33%)

71%

Of employees would recommend HSBC as a great place to work4

(2019: 66%)

Learning and skills development

5.2 million

Training hours carried out by our colleagues in 2020

(2019: 6.5 million)

2.9 days

Training days per FTE

(2019: 3.5 days)

21,000

GBM colleagues who completed virtual conduct training in 202012

For our full approach to social issues, see pages 52-69 of HSBC Holdings plc's Annual Report and Accounts 2020

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See page 7 for footnotes

Governance

We are committed to working with our regulators to manage the safety of the financial system. We aim to act with courageous integrity and learn from past events to help prevent their recurrence. We meet our responsibilities to society, including through being transparent in our approach to paying taxes. We also seek to ensure we respect global standards on human rights in our workplace and our supply chains, and continually work to improve our compliance management capabilities.

Respecting human rights

 Our pioneering scheme to help survivors of human trafficking is now used as a model for making financial services more accessible to vulnerable communities through the UN's Finance Against Slavery and Trafficking ('FAST') Survivor Inclusion Initiative

Protecting data

• We are committed to protecting and respecting the data we hold and process
• We have invested in business and technical controls to help prevent, detect and react to cybersecurity threats

Supporting financial inclusion

• In the UK, we are reducing barriers for those with no fixed address as well as for survivors or human trafficking; we also introduced banking services for refugees in Hong Kong
• We invest in financial education to help customers, colleagues and people in our communities be confident users of financial services. In 2020, we provided more of our own financial education content and had over 1.7 million unique visitors to our digital content

Safeguarding the financial system

• We have embedded a strong financial crime risk management framework across all

global businesses and all countries and territories in which we operate

• We continue to invest in new technology to enable us to make an impact in the fight against financial crime; each month we screen over 708 million transactions across 275 million accounts for signs of money laundering and financial crime

A responsible approach to tax

• We seek to pay our fair share of tax and to minimise the likelihood of customers using our products and services to evade or inappropriately avoid tax
• We are committed to applying both the letter and spirit of the law in all jurisdictions in which we operate

30.5%	$8,058m	$9,538m
Effective tax rate in 2020	Tax liabilities paid in 2020	Taxes collected on behalf of
		governments in 2020

Restoring trust

• Restoration of trust in our industry remains a significant challenge as past misdeeds

continue to remain in the spotlight

 We paid a total of $574m in regulatory fines in 2020 (2019: $1,271m)13. We have sought to learn from these past mistakes and are seeking to develop and implement specific measures designed to prevent recurrence of similar events in the future

For our full approach to governance issues, see pages 70-75 of HSBC Holdings plc's Annual Report and Accounts 2020

See page 7 for footnotes

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ESG datapack highlights

Sustainable finance commitments

$100bn commitment by type, $bn	2020	2019	2018
Facilitation		28.9	16.6	11.1
Financing		8.0	6.2	5.3
Investment		3.7	1.1	1.1
Total		40.6	23.9	17.5
$750bn - $1tn commitment by type, $bn	2020
Facilitation		27.9
Financing		4.9
New definitions		3.5
Sustainable financing		36.3
Facilitation		0.9
Financing		3.1
Sustainable infrastructure		4.0
Sustainable investments		3.8
Total		44.1
Employee profile
Employees by gender		2020	2019	2018
All employees
Male		48%	48%	48%
Female		52%	52%	52%
All senior leaders
Male		70%	71%	72%
Female		30%	29%	28%
Employees by ethnicity	UK - all employees UK - senior leaders	US - all employees	US - senior leaders
White	60.5%	60.0%	53.1%	65.8%
Asian	12.6%	10.5%	23.3%	14.9%
Black	2.5%	0.9%	7.2%	2.5%
Hispanic	-	-	9.7%	6.0%
Mixed race	1.4%	1.6%	-	-
Other	1.6%	1.6%	2.0%	2.1%
Prefer not to say	6.9%	9.9%	0.0%	0.3%
Not responded	14.4%	15.6%	4.6%	8.4%
Employee training data		2020	2019	2018
Total training hours (millions)		5.2	6.5	6.2
Training days per FTE		2.9	3.5	2.8
Employee turnover (voluntary leavers/average headcount)	2020	2019	2018
By gender
Male		8%	11%	11%
Female		8%	11%	11%
By age group
<=19			24%	36%	28%
20-29			14%	19%	20%
30-39			6%	9%	10%
40-49			4%	5%	5%
50-59			4%	4%	5%
>=60			14%	15%	15%

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