LONDON, April 22, 2026, 15:16 BST
- Investors asked Britain’s Financial Reporting Council to review HSBC’s 2025 accounts and audit.
- The group questioned whether HSBC and auditor PwC properly reflected climate risks in the bank’s books.
- The challenge lands before HSBC’s May 5 first-quarter earnings release and May 8 annual meeting.
A group of institutional investors has asked Britain’s Financial Reporting Council to review HSBC Holdings Plc’s 2025 accounts and audit, raising the pressure on Europe’s largest bank over how it measures climate-related financial risk. The Financial Reporting Council, or FRC, is the UK watchdog for company reporting, auditing and accounting standards.
The timing matters. HSBC is less than two weeks from its first-quarter earnings release on May 5, and investors will meet again at its annual general meeting on May 8. Climate accounting is moving from a sustainability debate into a capital question: whether future losses, asset values and loan risks are being properly reflected in the accounts.
The letter, copied to HSBC, the Prudential Regulation Authority and the FRC, said investors lacked visibility on how PwC had checked the bank’s position. Signatories included Sarasin & Partners, NEST, Merseyside Pension Fund, Lombard Odier Investment Management and Edentree Investment Management.
The investors said HSBC’s recent financial statements concluded the bank faces no major short- to medium-term hit from climate change, even while noting uncertainty over the issue. They said that view may be “excessively optimistic,” given risks from floods, wildfires and changing regulation. Transition risks are costs or losses that arise as economies shift away from high-carbon activity. MarketScreener
The group also wants HSBC to publish a sensitivity analysis, meaning an estimate of how more severe climate scenarios could affect loans, asset values or capital. The investor letter said a failure to account for probable losses or liabilities “could put investor capital at risk.” Reuters
HSBC did not immediately respond to a Reuters request for comment, while PwC declined to comment. The FRC confirmed it had received the letter but did not comment further.
The challenge comes after HSBC softened some of its climate targets. In November, the bank set new near-term financed-emissions targets for high-emitting sectors as ranges rather than single metrics, while keeping its broader ambition to reach net zero by 2050.
HSBC had already pushed back an earlier target for reaching net-zero emissions across its own operations, business travel and supply chains, saying progress in the real economy had been slow. Julian Wentzel, HSBC’s chief sustainability officer, told Reuters then that the bank was taking a “more measured approach” to oil and gas lending. Reuters
The bank is also in the middle of a wider reshaping under Chief Executive Georges Elhedery. HSBC reported 2025 pretax profit of $29.9 billion, down 7%, after $4.9 billion of one-off charges, but lifted its return on tangible equity target to 17% or better through 2028. Return on tangible equity is a closely watched bank profitability measure.
Climate scrutiny is not only an HSBC issue. HSBC last year followed JPMorgan, Citi and Morgan Stanley in leaving the Net-Zero Banking Alliance, a bank-led climate group, as several large lenders reassessed climate pledges under political and commercial pressure.
There is another moving part at HSBC’s markets business. Reuters reported on Tuesday that HSBC, one of the world’s largest bullion-trading banks, is hiring JPMorgan executive James Willis to lead global precious metals sales, after also recruiting Mark Augustynak from ICBC Standard Bank to head global metals trading.
The risk for HSBC is that the FRC review request turns into a broader challenge over whether banks are showing enough detail on climate losses before they appear in credit books. The counterpoint is plain: the watchdog may decide not to act, and HSBC’s accounts may stand without material change.
For now, the issue gives shareholders a fresh line of questioning before earnings and the AGM. HSBC’s own investor page showed its London shares at 1,350.60 pence, down 4 pence, with prices delayed and last updated at 14:13 GMT on Wednesday.
