Leading global banks have downgraded their top sustainability roles and shrunk dedicated teams as a result of slower-than-expected climate action and a backlash set off by Republican politicians in the US.
HSBC, Standard Chartered, Barclays and Wells Fargo are among those which have cut or rejigged environmental, social and governance roles, following a wave of expansion.
Standard Chartered has slashed the team led by its chief sustainability officer Marisa Drew from about 140 to 90 over the past year, according to people familiar with the changes. While many of the roles were reallocated to more client-facing teams, some senior staff were laid off.
A person close to the bank said the moves were made to embed sustainability issues more deeply into its operations and risk management, a theme echoed by others in the sector.
Chair José Viñals said in the bank’s latest results that it would continue to invest in addressing climate change. It set its first target for cutting emissions from underwriting oil and gas corporate bond issuances and said it made almost $1bn in income from sustainable finance.
The industry cutbacks have been anxiety-inducing for specialists in green lending structures or reporting rules, who have made careers out of a complex discipline still seen by some investment banking peers as “soft”. “We want to keep our heads down and get on with our job rather than make a song and dance about what we’re doing because things are fluid,” one banker said.
Wells Fargo did not replace its chief sustainability officer Robyn Luhning after she left the US bank last year. It instead promoted an existing staff member to the role of “head of sustainability”, appointed after a gap of eight months. The bank said the responsibilities remained the same.
Barclays’ group head of sustainability Laura Barlow was not replaced after she left the role in January. A person close to the bank said it had expanded the portfolio of colleague Daniel Hanna, as group head of sustainable and transition finance, to include her responsibilities
HSBC’s chief sustainability officer Céline Herweijer quit last year after she was removed from the executive committee as part of a wide restructuring of the bank under chief executive Georges Elhedery.
HSBC chief financial officer Pam Kaur took on “accountability for global sustainability” on her step across from the chief risk officer’s role in January, and the CSO post has since been filled by Julian Wentzel, previously head of global banking for HSBC Middle East, north Africa and Turkey.
In its latest results, HSBC indicated it could make radical changes to its strategy for cutting the carbon footprint of its lending later this year. It also pushed back a target to hit net zero emissions in its own operations and supply chains from 2030 to 2050.
HSBC had been one of the first major global banks in 2022 to say that it would no longer directly finance new oil and gas fields and would demand detailed decarbonisation plans from energy clients.
Many European banks are taking a “wait-and-see” approach, as the Trump administration dismantles US climate policy, and the EU weighs measures which would scale back its own sustainable reporting requirements.
Banks blame clients in some instances for the volte face. HSBC said in its results statement that the global energy transition had been “slower than envisaged” because of factors outside its control.
“It’s a tough time to be in the business,” said one chief sustainability officer. “It’s really hard.”
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