Transition Pathways: Energy

With today's headwinds of energy security and inflation adding to the challenge of tackling the climate crisis, how are companies moving ahead with a resilient, affordable and orderly energy transition? As businesses decide whether to divest, diversify, optimise their infrastructure or offset their emissions, HSBC's Transition Pathways brings together industry insights and sector expertise to help business leaders act on their transition plans, across their capex, supply chains and wider social strategies.

Transition plans are becoming the new normal and, in an increasing number of markets, a regulatory and disclosure requirement for both corporates and financial institutions. Transition plans demonstrates action and practical steps against ambition and show regulators, financiers, investors and customers how an organisation intends to reach net zero, often by 2050, across its operations and value chains.

Our net zero ambition means aligning financed emissions – the greenhouse gas emissions of our clients – to net zero by 2050. We’re setting 2030 targets in different sectors, focusing on the heaviest emitters first. We have set 2030 targets for a 34% reduction in financed emissions for the oil and gas sector, and a 75% reduction in the financed emissions intensity for power and utilities.

How is the sector transitioning?

How are energy businesses approaching the transition to net zero? What is accelerating their decarbonisation, and what is holding them back? We have worked with Kantar to ask 300 companies in over 15 countries what the transition means for their business. (Methodology available below).

Read on to discover how much they are investing and where they are focusing their efforts.

Growth

95%

of businesses see net zero as a significant contributor to business growth

Macro drivers

52%

say energy security considerations are accelerating their transition

Capex

31%

are already allocating more than 10% of their capital expenditure towards decarbonisation

There is no doubt that companies in the energy sector see emissions reduction as a commercial imperative. It is also clear that the pathway to net zero will be long and challenging. Collaboration with industry, technical and financial partners will help energy companies accelerate towards their objectives.
Alexi Chan | Head of Global Banking Sustainability, HSBC

Fuels and Frictions: Surveying sentiment towards the energy transition

Download the report

Survey methodology

For HSBC’s Transition Pathways survey, HSBC has worked with Kantar. The survey is not wholly-representative of HSBC’s customer base and covers respondents across 300 key financial decision makers from businesses operating in the energy sector, comprising Oil & Gas (135 businesses), Power (141 businesses) and Coal (24). The survey findings and responses have not been independently verified. Renewables were the primary energy source for 132 businesses. Businesses were located in Europe (120), Asia (101), the Middle East (43) and North/Central America (36). Overall 77 (26%) had a turnover between $5 and $10m, 70 (23%) had a turnover between $10 and $500m, 153 (51%) turnover in excess of $500m, of which 65 (22%) had turnover in excess of $2.5Bn. 135 (45%) had been established for less than 10 years and 165 (55%) for more than 10 years. Data was collected through an online questionnaire and the survey ran for three weeks from 26 September to 18 October 2022.

In preparing this survey, HSBC has relied upon appropriate available data, information and responses given at the time of writing. This report should not form the basis of any third party’s decision to undertake, or otherwise engage in, any activity and third parties do not have any right to rely on it. Neither HSBC nor Kantar accept any duty of care, responsibility or liability in relation to this research or its application or interpretation, including as to the accuracy, completeness or sufficiency of it or any outcomes arising from the same.

Disclaimer

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