Investors press HSBC review

A group of investors overseeing about $400 billion wants UK regulators to review whether HSBC’s 2025 accounts properly captured climate risk. (bloomberglaw.com) The investors wrote on April 20 to the Financial Reporting Council, Britain’s accounting watchdog, asking it to examine HSBC’s financial statements and PwC’s audit for the year ended Dec. 31, 2025. The signatories included Sarasin & Partners, Lombard Odier Investment Managers and EdenTree Investment Management. (sarasinandpartners.com, reuters.com) Their complaint is about accounting, not just sustainability branding. They said HSBC may be giving an “excessively optimistic” picture of near-term climate exposure and said they cannot see how PwC tested that judgment in the audit. (bloomberg.com, sarasinandpartners.com) The fight turns on a dry but important bank number: expected credit losses, the reserves banks set aside for loans that could sour. The investor letter says climate risk should feed into those assumptions when it is material, especially for carbon-heavy sectors facing policy shifts, physical damage or faster decarbonization. (sarasinandpartners.com, ifrs.org) That argument lands as UK and international standard-setters have been tightening guidance. The Prudential Regulation Authority published Supervisory Statement 5/25 in December 2025, and the International Accounting Standards Board issued climate-related examples in November 2025 showing how uncertainties can affect credit-risk and impairment disclosures. (bankofengland.co.uk, ifrs.org) HSBC has said its climate metrics depend on incomplete client data and evolving methodologies. In a November 2025 update on financed-emissions targets, the bank said reporting quality varies by sector and year, and that missing emissions data from clients can affect future progress and reporting. (hsbc.com) The bank has also kept its broader net-zero ambition while revising parts of the path to get there. HSBC said in that same update that it remains committed to becoming a net-zero bank by 2050, even as it reviewed and adjusted interim 2030 financed-emissions targets. (hsbc.com, esgtoday.com) This is the second year of investor pressure on HSBC’s climate stance. In May 2025, a separate investor group managing about £1.2 trillion urged the bank to reaffirm its climate commitments after it delayed its operational net-zero target and changed governance around sustainability. (shareaction.org, cefpro.com) The immediate question now is whether the Financial Reporting Council opens a formal review of HSBC’s 2025 reporting and whether that spills into scrutiny from the Prudential Regulation Authority. The investors’ letter asks for both the accounts and the audit trail behind them to be tested against the UK’s “true and fair view” standard. (sarasinandpartners.com, reuters.com)