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HSBC Amanah Sustainability

Overview of HSBC Amanah Key Credit Highlights Financial Highlights HSBC Group Sustainability HSBC SDG Bond Framework 12 HSBC's Commitment on Sustainability ■ HSBC is fully committed to its own sustainability approach and compliance with the sustainability commitments that we have made in the public domain ■ HSBC recognises that we have responsibilities not only towards our customers, employees and shareholders, but also the countries and communities in which we operate. This means understanding and managing the impact we have on society and the environment, and investing in the future of our employees and the communities we serve ■ HSBC Group Sustainability's mandate is to ensure that the business translates this recognition into practice. Context Climate change represents an urgent and irreversible threat to human society, as recognised by the almost 200 countries that have signed the 2015 Paris Agreement on climate change. An estimated USD90 trillion of investment is needed in new green infrastructure over the next 15 years double the current annual rate of spending just to keep the global temperature increase below two degrees. - Major injections of capital are needed to pay for more efficient and less carbon- intensive technologies and infrastructure, to reduce the carbon footprint of established companies and industries, and to cover the costs of climate adaptation. HSBC's Commitments Provide USD100bn of sustainable financing and investment by 2025 Source 100% of our electricity from renewables sources by 2030 (90% by 2025) Reduce our exposure to thermal coal and actively manage the transition for other high carbon sectors Adopt recommendations of Task Force on Climate- related Financial Disclosures Lead and shape the debate around sustainable finance and investment Provide USD 100bn of financing/investment to develop dean energy, lower-carbon technologies, and projects that contribute to the delivery of the Paris Agreement and the UN Sustainable Development Goals Lead the development of sustainable capital markets, support corporate and institutional clients in managing risks and promote sustainable investment products for retail and private banking clients Use direct investment and direct purchases via PPAs and similar mechanisms that directly help the financing of new renewable electricity assets. Collaborate with RE100, governments and regulators to open up renewable energy markets where PPAs¹ or similar are not currently available Reduce electricity per FTE by 20% by 2020 Discontinue financing of new thermal coal mines (including new customers dependent on it) and new coal-fired power plants in developed countries and continuously reinforce lending criteria in developing countries Engage with clients in high carbon sectors to influence their transition strategies Continuously review our risk policies on low carbon technologies Report according to governance/ strategy/ risk management recommendations of the task force Engage with academia/ industry associations/ civil society networks to support robust climate scenario analysis to price transition and physical risk. Promote uptake of these recommendations across our global network Establish a Centre of Sustainable Finance to provide thought leadership about climate change and the role of the financial services sector. Promote the development of industry-wide definitions, standards, tools and metrics to enhance market analysis of Environmental Social Governance (ESG) issues and impacts. 1. PPA Power purchase agreement 2. FTE Full time equivalent
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