Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 90

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 90
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 analysis may have up to a two-year lag in reported emissions figures, and we are working with data providers to help reduce this. Mapping external datasets to our internal client entities is challenging due to complex company ownership structures. – The methodology and data used to assess financed emissions and set targets are new and evolving, and we expect industry guidance, market practice, and regulations to continue to change. As we undertake the review of our 2030 financed emissions targets, we will use appropriate data sources and current methodologies available. – We remain conscious that the attribution factor used in the financed emissions calculation is sensitive to changes in drawn amounts or market fluctuations, and we plan to be transparent around drivers for change to portfolio financed emissions where possible. – We calculate sector-level emissions intensity metrics using a portfolio-weighted approach. Due to data limitations, we are unable to obtain production data for all of our clients. We therefore calculate an emissions intensity figure using the 75th percentile of available data points to meet this data gap. – The classification of our clients into sectors is performed with inputs from subject matter experts, and will also continue to evolve with improvements to data and our sector classification approach. Our internal data on customer groups used to source financial exposure and emissions data is based on credit and relationship management attributes, and is not always aligned to the data needed to analyse emissions across sector value chains. As the sub-sector, and therefore the value chain classification, is based on judgement, this may be revised as better data becomes available. As a consequence, classification changes can result in sectoral movement year-on-year. Emissions are calculated at a counterparty group level, rather than at subsidiary level, mainly due to the availability of emissions data, but this may lead to over-or under-estimation of emissions compared with calculation at the counterparty level. Companies with multiple activities, such as conglomerates with near to equal business activity split across multiple sectors, are excluded as these can have different activities covered by multiple sector targets. – The operating environment for climate analysis and portfolio alignment is maturing. We continue to work to improve our data management processes. For further details of our financed emissions methodology, exclusions, and limitations, see our Financed Emissions and Thermal Coal Exposures Methodology at www.hsbc.com/who- we-are/esg-and-responsible-business/esg- reporting-centre.

| HSBC Holdings plcAnnual Report on Form 20-F | 49 |

Financed emissions continued Our approach to emissions re-baselines and restatements The PCAF recommends