TIDMHSBA
RNS Number : 0446Q
HSBC Holdings PLC
23 February 2021
Environmental,
social and governance review
43 Our approach to ESG
44 Climate
52 Customers
62 Employees
70 Governance
Our ESG reporting
We have changed how we report this year by embedding the content
previously provided in our stand-alone ESG Update within our Annual
Report and Accounts. This is to further demonstrate that how we do
business is just as important as what we do. In response to the
feedback from our investors, we are publishing a more extensive
breakdown of ESG information in a supplementary ESG Data Pack for
the first time alongside the ESG review, which can be found at
www.hsbc.com/esg.
42 HSBC Holdings plc Annual Report and Accounts 2020
Our approach to ESG
We have sought to support our stakeholders through an
unprecedented year, as we set a new climate ambition and refined
our purpose, ambition and values to reflect our strategy.
About the ESG review
Our new purpose is: 'Opening up a world of opportunity'.
To achieve our purpose and deliver our strategy in a way that is
sustainable, we are guided by our values: we value difference; we
succeed together; we take responsibility; and we get it done.
We also need to build strong relationships with all of our
stakeholders, who are the people who work for us, bank with us, own
us, regulate us, and live in the societies we serve and the planet
we all inhabit.
Having a clear purpose and strong values have never been more
important, with the Covid-19 pandemic testing us all in ways we
could never have anticipated.
We introduced payment relief measures to our customers as part
of government-backed and our own schemes, which impacted 87,000
personal accounts and $5.5bn in balances, as at the end of 2020. We
also provided $35.3bn of lending support to more than 237,000
wholesale customers. For our colleagues, we adapted to new ways of
working and provided extra support and resources to manage their
mental and physical health. We also announced our climate ambition
of net zero by 2050, but we know this is a journey and that the
current means of tracking emissions globally need improving.
In this Environmental, Social and Governance ('ESG') review, we
aim to set out our approach to our climate, customers, employees
and governance.
Environment
* We announced our net zero climate ambition and
increased our climate disclosures under TCFD, but we
recognise more work is needed as methods to measure
progress evolve.
* We surpassed our goal of reducing CO2 per FTE to 2.0
tonnes in 2020, although we acknowledge this was
mainly due to the consequences of the Covid-19
pandemic.
Read more in the Climate section on page 44.
Social
* The customer shift to digital accelerated, with 54%
of retail customers digitally active in 2020. Mobile
app downloads of our core business digital platform,
HSBCnet, rose 146%.
* An increase in complaints in certain markets
reflected a challenging year, but we continued to
embed new ways of capturing feedback.
Read more in the Customers section on page 52.
* Employees responded to our Snapshot surveys at a
record rate, and our employee advocacy rose five
points to 71%.
* We met our target of 30% women in senior leadership
roles, and published ethnicity data in the UK and US.
We recognise we need to take action, and aim to at
least double the number of Black employees in senior
leadership roles by 2025.
Read more in the Employees section on page 62.
Governance
* Our pioneering scheme to help survivors of human
trafficking is used as a model for making financial
services more accessible.
* In seeking to safeguard the financial system, we
screen over 708 million transactions each month for
signs of money laundering and financial crime.
Read more in the Governance section on page 70.
How we decide what to measure
We listen to our stakeholders in a number of different ways,
which we set out in more detail within the ESG review. We use the
information they provide us to identify the issues that are most
important to them - and consequently also matter to our own
business.
Our ESG Steering Committee and other relevant governance bodies
regularly discuss the new and existing themes and issues that
matter to our stakeholders. Our management team then uses this
insight, alongside the framework of the ESG Guide (which refers to
our obligations under the Environmental, Social and Governance
Reporting Guide contained in Appendix 27 to The Rules Governing the
Listing of Securities on the Stock Exchange of Hong Kong Limited)
to choose what we measure and publicly report in this ESG
review.
Recognising the need for a consistent and global set of ESG
metrics, we have committed to start aligning to World Economic
Forum core metrics from next year.
Under the ESG Guide, 'materiality' is considered to be the
threshold at which ESG issues become sufficiently important to our
investors and other stakeholders that they should be publicly
reported. We are also informed by stock exchange listing and
disclosure rules globally. We know that what is important to our
stakeholders evolves over time and we will continue to assess our
approach to ensure we remain relevant in what we measure and
publicly report.
For further information on our approach to reporting, see the
'Additional information' section on page 375.
HSBC Holdings plc Annual Report and Accounts 2020 43
Climate
We are powering new solutions to the climate crisis and
supporting the transition to a low-carbon future, moving to carbon
net zero ourselves and helping others to do so too.
At a glance
Our climate ambition
The transition to net zero carbon emissions creates a clear
opportunity to set the global economy on a more sustainable,
resilient and inclusive path. We have the ability to catalyse a
resilient, vibrant future by financing the transformation of
businesses and infrastructure to a low-carbon economy.
We have a strong track record of leadership in the transition to
a low-carbon economy. In 2017, we committed that we would provide
and facilitate $100bn of sustainable finance and investment by
2025. Since then, we have achieved $93.0bn of that goal, launched a
number of award-winning products and been recognised as a leading
bank for sustainable finance.
Achieving the scale of change required for the world to meet the
Paris Agreement goal of net zero by 2050 will require us to go
further and faster. As such, in October 2020, we set out a
three-part plan to accelerate financing for the transition to net
zero, underpinned by strong governance and risk management.
-- A summary of our fourth TCFD disclosure can be found on page
20 in our Strategic Report. The full
TCFD Update 2020 can be found at www.hsbc.com/esg .
Becoming a net zero bank
To achieve our ambition to be a net zero bank, we can make
changes both in our own operations and for our customers through
our financing portfolio. We aim to bring our operations and supply
chain to net zero by 2030 or sooner, and align our financed
emissions to the Paris Agreement goal to achieve net zero by 2050
or sooner.
-- Read more on becoming a net zero bank on page 45.
Supporting our customers through transition
The most significant contribution we can make to solving the
climate crisis is supporting our customers to decarbonise, while
helping to ensure their ongoing resilience and prosperity. Our aim
is to provide between $750bn and $1tn of sustainable finance and
investment by 2030 to support our customers to transition to lower
carbon emissions.
-- Read more on supporting our customers through transition on page 48.
Unlocking climate solutions and innovations
We need new ideas to increase the pace of the transition to net
zero. We are working with a range of partners to increase
investment in natural resources, technology and sustainable
infrastructure. We also plan to donate $100m to a programme that
will support climate solutions to scale over the next five
years.
-- Read more on unlocking climate solutions and innovations on page 50.
Our approach to sustainability policies
Our sustainability policies help define our appetite for
business, and seek to encourage customers to meet good
international standards of practice. In light of our new net zero
ambition, we are undertaking a review of our sustainability risk
policies. We have also removed an exception to our energy policy
and are a signatory of the Equator Principles.
-- Read more on our approach to sustainability policies on page 51.
Awards and achievements
Euromoney Awards for Excellence 2020
World's Best Bank for Sustainable Finance (second consecutive
year)
Asia's Best Bank for Sustainable Finance
Middle East's Best Bank for Sustainable Finance
Western Europe's Best Bank for Sustainable Finance
The Banker Investment Banking Awards 2020
Best Investment Bank for Sustainability
Best Investment Bank for Green/Climate Action Bonds
Best Investment Bank for Sustainable SSA Financing
Environmental Finance Bond Awards 2020
Lead Manager for the Year for Green Bond Bank
Lead Manager for the Year for Green Bond SSA
Lead Manager for the Year for Sustainability Bond Local
Authority/Municipality
Lead Manager for the Year for Sustainability Bond Bank
Lead Manager for the Year for Social Bond SSA
44 HSBC Holdings plc Annual Report and Accounts 2020
Becoming a net zero bank
Securing the future of our planet - and economic resilience and
prosperity - depends on the transition to a net zero global
economy. The Intergovernmental Panel on Climate Change, a United
Nations body, indicated that in order to avoid the worst impacts of
climate change, we need to reduce global greenhouse emissions by
45% by 2030, and achieve net zero by 2050.
Our net zero ambition
In October 2020, we announced our ambition to become net zero in
all direct and indirect emissions, known as scope 1, 2 and 3
emissions. We aim to deliver this by achieving net zero in our
operations and our supply chain by 2030 or sooner. We also plan to
align our financed emissions - the carbon emissions of our
portfolio of customers - to the Paris Agreement goal of net zero by
2050 or sooner.
We have outlined on the following page a set of metrics and
indicators against which we plan to report progress towards our
climate ambition. We continue to make regular TCFD-aligned
disclosures and have published our fourth disclosure, a summary of
which is on page 20. Our stand-alone TCFD Update 2020 is available
at www.hsbc.com/esg.
We understand that achieving net zero requires not just
emissions reduction but investment in carbon offsets for a balanced
transition. However, the world currently lacks both a globally
consistent, future-proofed standard to measure financed emissions
and a fully functional carbon offset market. We are working closely
with our peers, central banks and industry bodies to mobilise the
financial system around these important goals.
Reduce, replace and remove
To achieve net zero carbon emissions in our operations and our
supply chain, we are building on the set of reduction targets that
we set in 2011 to reduce environmental and carbon impacts from our
operations by 2020. Among other achievements, we reduced carbon
emissions from energy and travel per FTE by 49.6% from the 2011
baseline. For further details on our progress, see
www.hsbc.com/who-we-are/our-climate-strategy/becoming-a-net-zero-bank.
For our 2030 ambition, we have three elements to our strategy:
reduce, replace and remove. We plan to first focus on reducing
carbon emissions from consumption, and then replacing remaining
emissions with low-carbon alternatives in line with the Paris
Agreement goal of limiting global warming to below 1.5degC. We plan
to remove the remaining emissions that cannot be reduced or
replaced by procuring high-quality offsets at a later stage.
We will compare our success against our carbon emissions in
2019, including scope 1, 2 and 3 emissions. We will use 2019
figures as a baseline due to the Covid-19 outbreak affecting
working behaviours, which helped to drive further reductions
reflected in 2020 results. For our 2019 baseline, our operational
emissions were mainly composed of energy (approximately 16%),
travel (approximately 6%) and supply chain emissions (approximately
78%). We are in the process of reviewing our supply chain
methodology and we will be updating our 2019 baseline, accordingly.
We will take into consideration cabin class in our recording of
travel emissions, including the baseline, as it represents a more
accurate representation of our air travel emissions.
Reducing our operational emissions
In 2017, we committed to achieving 100% renewable power across
our operations by 2030, joining other global companies in the RE100
initiative. As electricity currently makes up 92% of our energy
emissions, our aim is to reduce electricity consumption by 50% over
the next 10 years. We plan to then transition the remainder to
renewable energy. In 2020, 37.4% of our electricity was renewable,
mainly due to our power purchase agreements of wind and solar
energy in the UK, Mexico and India. We plan to continue to build
our power purchase agreements portfolio and expand our purchase of
green tariffs in markets where these are available.
The majority of our travel emissions are concentrated in air
travel, which fell in 2020 due to the Covid-19 outbreak. As travel
restrictions are lifted, we expect our travel emissions to rise.
However, we will continue to encourage the use of technological
solutions where possible to provide connectivity with colleagues
and customers.
Explaining scope 1, 2 and 3 emissions
To measure and manage our carbon emissions, we follow the
Greenhouse Gas Protocol global framework, which identifies three
scopes of emissions. Scope 1 represents the direct emissions we
create. Scope 2 represents the indirect emissions resulting from
the use of electricity and energy to run a business. Scope 3
represents indirect emissions attributed to upstream and downstream
activities taking place to provide services to customers. Our
upstream activities include business travel and emissions from our
supply chain including transport, distribution and waste. Our
downstream activities are those related to investments and financed
emissions.
For further details, see our ESG Data Pack at
www.hsbc.com/esg.
Scope 2 Scope 3 Scope 1 Scope 3
Indirect Indirect Direct Indirect
=================== ===================== ================== =====================
Electricity, Investments
steam heating and financed
and cooling Employee commuting(1) Company facilities emissions
Business travel Company vehicles
Supply chain
------------------- --------------------- ------------------ ---------------------
Upstream activities Upstream activities HSBC Holdings Downstream activities
------------------- --------------------- ------------------ ---------------------
1 HSBC-sponsored shuttles only
HSBC Holdings plc Annual Report and Accounts 2020 45
Working with our supply chain
As the majority of our emissions are within our supply chain, we
know we cannot achieve our net zero goal without our suppliers
joining us on our journey. Our supplier emissions are currently
calculated using a methodology based on supplier spend. In 2020, we
began the three-year process of targeting our largest suppliers,
representing 60% of our annual supplier spend, to encourage them to
make their own carbon commitments, and to disclose their emissions
via the CDP supply chain programme. This programme will allow us to
work with our suppliers to understand their commitment to carbon
emission reduction, to educate those that are starting their
journey, and to collaborate with those that are leading in this
area.
Our lending portfolio
At the heart of our climate plan is a goal to align our financed
emissions to the Paris Agreement goal of net zero by 2050 or
sooner. This means making financing decisions with a consideration
for climate change, and intensifying our support for customers in
their transition to lower carbon emissions.
In 2017, we pledged to provide and facilitate $100bn of
sustainable finance and investment by 2025 to support our customers
as they switch to more sustainable ways of doing business, and by
the end of 2020 we had already achieved $93.0bn of that ambition.
In October 2020, we set ourselves a new target of providing between
$750bn and $1tn in sustainable finance and investment by 2030 (for
further details, see page 48).
We will work with our portfolio of customers to provide expert
advice and support them on their transition to lower carbon
emissions, while taking into account the unique conditions for
customers across developed and developing economies. To do this, we
will increase our portfolio of transition finance solutions to help
even the most heavy-emitting sectors to progressively decarbonise,
while helping to ensure a just and stable transition to maintain
economic stability.
Included within the $100bn facilitation total is $2.8bn-worth of
advisory services on HSBC-issued green/SDG bonds. Our green bond
report summarises and our asset register lists the loans that
underpin our issuances. The latest report includes $1.6bn of
balances as at 30 June 2020 that have been included within the
financing total. The green report and asset register are available
at:
www.hsbc.com/our-approach/esg-information/esg-reporting-and-policies.
Our carbon dioxide emissions in 2020
We report our carbon emissions following the Greenhouse Gas
Protocol, which incorporates the scope 2 market-based emission
methodology. We report carbon dioxide emissions resulting from
energy use in our buildings and employees' business travel.
In 2020, we surpassed our carbon emissions target of 2.0 tonnes
per FTE, achieving 1.76 tonnes per FTE. This was mainly attributed
to travel restrictions and the reduction of usage of our buildings
due to the Covid-19 outbreak. We also implemented over 600 energy
conservation measures that amounted to an estimated energy
avoidance in excess of 15 million kWh.
In 2020, we collected data on energy use and business travel for
our operations in 28 countries and territories, which accounted for
approximately 93% of our FTEs. To estimate the emissions of our
operations in countries and territories where we have operational
control and a small presence, we scale up the emissions data from
93% to 100%.
We then apply emission uplift rates to reflect uncertainty
concerning the quality and coverage of emission measurement and
estimation. The rates are 4% for electricity, 10% for other energy
and 6% for business travel. This is consistent both with the
Intergovernmental Panel on Climate Change's Good Practice Guidance
and Uncertainty Management in National Greenhouse Gas Inventories
and our internal analysis of data coverage and quality.
Further details on our methodology, our third-party assurance
report and relevant environment key facts found in our ESG Data
Pack can each be found at www.hsbc.com/esg.
Carbon dioxide emissions
in tonnes
=========================
2020 2019
------- -------
Total 406,000 530,000
From energy 363,000 414,000
Included energy UK 8,000 10,400
From travel 43,000 116,000
Carbon dioxide emissions
in tonnes per FTE
=============================
2020 2019
----- -----
Total 1.76 2.26
From energy 1.57 1.76
From travel 0.19 0.5
Energy consumption in GWh
==============================
2020 2019
----- ------
Total Group 928 1,050
UK only 247 281
Carbon emissions (total and FTE)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
------- ------- ------- ------- ------- ------- ------- ------- ------- ------
CO2 per FTE (tonnes) 3.44 3.61 3.43 3.08 2.97 2.63 2.49 2.39 2.26 1.76
CO2 per FTE (tonnes)
target 2.5 2.5 2.5 2.5 2.5 2.5 2 2 2 2
Total CO2 emissions
(tonnes) 991,000 963,000 889,000 795,000 771,000 617,000 580,000 559,000 530,000 406000
Key:
Total CO2 emissions (tonnes)
CO2 per FTE (tonnes)
The 2020 target was set at 2.5 CO2 tonnes/FTE until 2017, when
the target was stretched to 2.0 CO2 tonnes/FTE
46 HSBC Holdings plc Annual Report and Accounts 2020
Measuring our progress
We are using several metrics to measure our progress of our net
zero journey, including our carbon emissions, renewable energy
sourced for our operations, balance sheet exposure to
carbon-intensive sectors and progress made against our sustainable
finance commitment.
We intend to develop clear, measurable pathways to net zero
within our financing portfolio, using the Paris Agreement Capital
Transition Assessment ('PACTA') tool, which measures the alignment
of relevant sectors with net zero.
In 2020, we began to apply PACTA to the relevant segments of our
loan book, starting with the automotive sector, to build our
knowledge of the tool and improve our understanding of its
effectiveness and limitations (for further details, see page 18 of
our TCFD Update 2020).
We know this is a journey and recognise that the current means
of measurement of financed emissions globally need improving to
track reductions better. Over the course of 2021, we will be
refining our approach to financed and supply chain emissions,
formalising the qualifying criteria for sustainable finance, and
enhancing reporting on investments.
In the following table, we set out our ambition, the metrics and
indicators we used in 2020 to measure our progress, and the metrics
and indicators we aim to develop in future to measure our
progress.
Metrics and indicators Metrics and indicators
Ambition used in 2020 to be developed in 2021
============================== ============================= ===============================
Becoming a net zero bank(1)
------------------------------ ============================= ===============================
Be net zero in our operations CO(2) emissions per FTE Supply chain emissions
and supply chain by 2030 across scope 1, 2 and
or sooner 3
Absolute CO(2) emissions
across scope 1, 2 and
3
Percentage of renewable
electricity sourced
Align our financed emissions Illustrative PACTA results Net zero alignment of
to achieve net zero by for our automotive book. our financing portfolio
2050 or sooner
(For further details,
see pages 18 and 19 of
our TCFD Update 2020.)
Percentage of wholesale
loans and advances in
high transition risk sectors
(For a breakdown by sector,
see page 9 of our TCFD
Update 2020.)
Illustrative impacts of
climate scenarios on our
transition risk sectors.
(For further details of
our scenario analysis,
see pages 14 to 16 of
our TCFD Update 2020.)
============================== ============================= ===============================
Supporting our customers
------------------------------ ----------------------------- -------------------------------
Support our customers Sustainable finance and
in the transition to a investment provided ($bn)
sustainable future with
$750bn to $1tn of sustainable
finance and investment
by 2030
(For further details of
our progress, see pages
48 to 50.)
Ranking in Dealogic green,
social and sustainable
bond league tables(2)
Unlocking new climate
solutions
------------------------------ ----------------------------- -------------------------------
Help transform sustainable Established HSBC Pollination Cleantech investment within
infrastructure into a Climate Asset Management our technology venture
global asset class, and with the aim to launch debt fund
create a pipeline of bankable the first fund in mid-2021
projects
(For further details, Philanthropic programme
see page 50.) to provide scale to climate
innovation ventures, renewable
energy, and nature-based
solutions
1 Our reported CO2 emissions in 2020 related to energy and
business travel. For further details on scopes 1, 2 and 3, and our
progress on carbon emissions and renewable energy targets, see
pages 45 and 46.
2 Dealogic ranking based on apportioned bookrunner value,
excluding self-issuances.
HSBC Holdings plc Annual Report and Accounts 2020 47
Supporting our customers through transition
Our ability to finance the transformation of businesses and
infrastructure is key to building a sustainable future for our
customers and society. The most significant contribution we can
make to this is supporting our portfolio of customers to
decarbonise within the transition to a net zero global economy.
A leader in sustainable finance
We are a recognised leader in sustainable finance, helping to
pioneer the market for green, social and sustainable bonds and
attaching ambitious environmental targets to business loans. We
maintained leadership in green, social and sustainable bonds,
ranking third globally in 2020, according to Dealogic on an
excluding self-mandated basis. We also set up HSBC Pollination
Climate Asset Management, the first large-scale venture to invest
in natural capital as an asset class (see page 50). We have been
recognised as the World's Best Bank for Sustainable Finance by
Euromoney in 2019 and 2020.
In 2020, we continued to expand the horizons of sustainable
finance. We helped the Egyptian government launch the first
sovereign green bond in the Middle East and supported Henkel, a
German household goods company, to issue the world's first plastics
reduction bond (see page 76). We also issued the first transition
Islamic bond to enable Etihad, a Middle Eastern airline, to become
more sustainable (see page 266).
As we set out below, we are intensifying our support to
customers as they transition to lower carbon emissions. Our vision
is to help create a vibrant, thriving and resilient future that
opens up opportunities for new skills, ideas and jobs to thrive.
Providing transition finance solutions, particularly in emerging
markets where the opportunity is greatest, is core to our climate
strategy.
Transition solutions
In 2017, we committed to providing and facilitating $100bn of
sustainable finance and investment by 2025. At the end of 2020, we
had fulfilled $93.0bn of this commitment, comprising $66.9bn
through facilitating the flow of capital and providing customers
access to capital markets, and $20.0bn in financing and $6.1bn in
investments to support environmental and social goals.
Our sustainable finance commitment has enabled sustainable
infrastructure and energy systems, financed the transition towards
net zero emissions by promoting decarbonisation efforts across the
real economy, and enhanced investor capital through sustainable
investments.
We recognise that more and faster action is needed to achieve
the Paris Agreement goal of net zero by 2050 or sooner. That is why
in October 2020 we announced our ambition to provide between $750bn
and $1tn of sustainable finance and investment over the next 10
years. This new commitment builds on our 2017 target. Our new
commitment incorporates sustainable finance and investment of
$40.6bn in 2020, which also contributed to our initial 2017 target,
as well as additional products of $3.5bn.
Our sustainable finance and investment in 2020 for our updated
target comprises 23% green and sustainability-linked lending to
companies, 9% investments we manage and distribute on behalf of
investors, and 68% facilitating the flow of capital and providing
access to capital markets.
We have developed and evolved our existing data dictionary,
taking into consideration the principles we developed with UK
Finance in the white paper 'Sustainable finance: Establishing a
principles-based framework for the measurement and reporting of
multi-year commitments'. Our progress will be published each year
and will seek to continue to be independently assured.
Our revised data dictionary, which includes a detailed
definition of contributing activities, and our ESG Data Pack, which
includes our third-party assurance letter and the breakdown of our
sustainable finance and investment, can be found at
www.hsbc.com/who-we-are/esg-and-responsible-business/esg-reporting-and-policies.
For further details of our net zero ambition, see
www.hsbc.com/who-we-are/our-climate-strategy/becoming-a-net-zero-bank.
Sustainable finance
We define sustainable finance as:
-- any form of financial service that integrates ESG criteria
into business or investment decisions; and
-- financing, investing and advisory activities that support the
UN Sustainable Development Goals ('SDGs'), in particular taking
action to combat climate change. The SDGs, also known as the Global
Goals, were adopted by all UN member states in 2015 as a universal
call to action to end poverty, protect the planet and ensure that
all people enjoy peace and prosperity by 2030.
We have reviewed and updated these definitions to reflect our
updated climate ambition, which is available at
www.hsbc.com/who-we-are/esg-and-responsible-business/esg-reporting-and-policies.
Our approach to climate risk
We continue to improve the identification, oversight and
management of climate risk. In 2020, we enhanced our climate risk
appetite statement with quantitative metrics to articulate the
risks from climate change, and we plan to develop our risk appetite
and key indicators iteratively through 2021. We also formalised our
overall approach to climate risk management to integrate climate
risk into the Group-wide risk management framework.
For further details on climate risk, see our TCFD Update 2020 at
www.hsbc.com/esg.
$93.0bn
Cumulative progress since 2017 on our commitment to provide and
facilitate sustainable finance and investment.
(Target: $100bn by 2025)
3(rd)
Dealogic ranking for green, social and sustainability bonds
globally in 2020.
(2019: 2nd)
48 HSBC Holdings plc Annual Report and Accounts 2020
Sustainable infrastructure
Good infrastructure is the backbone of any successful society
and economy. However, addressing climate change requires the world
- particularly emerging markets - to develop a new generation of
sustainable infrastructure quickly. The OECD estimates that up to
$6.9tn each year is needed through to 2030 to achieve this. While
many institutions have been engaged in mobilising finance for this
purpose, there remains a significant investment gap and lack of
adequate, bankable projects. Stronger standards are also needed to
bring investors to the table.
To help solve for this, we are leading the Finance to Accelerate
the Sustainable Transition-Infrastructure ('FAST-Infra')
initiative. This was established in partnership with the
International Finance Corporation ('IFC'), the OECD, the World
Bank's Global Infrastructure Facility and Climate Policy Initiative
under the auspices of the One Planet Lab to develop a consistent,
globally applicable labelling system for sustainable infrastructure
investment. This will aim to ensure that governments and project
developers embed high ESG standards into new infrastructure to
access this label. We also co-chair the Coalition for Climate
Resilient Investment, launched at the UN General Assembly's Climate
Action Summit in 2019, bringing together institutional investors,
banks, insurers, rating agencies and governments to develop
risk-informed frameworks and tools to integrate and price physical
climate risks in decision making.
Responsible and sustainable investment
We offer a broad suite of ESG capabilities across asset
management, global markets, research, wealth, private banking and
securities services, enabling institutional and individual
investors to manage risk and pursue ESG-related opportunities.
Our endeavour is to influence the market through active
engagement on ESG issues. We have a dedicated Responsible
Investment team across developed and emerging markets. The team's
activities, along with portfolio managers and other investment
analysts, led to ESG issues being raised in engagements with over
2,300 corporate and non-corporate issuers in 78 markets in 2020. We
voted on more than 86,000 resolutions at over 8,200 company
meetings in 70 markets.
At HSBC Global Asset Management, nearly 89% of total assets
under management were invested according to at least one of the
seven strategies defined by the Global Sustainable Investment
Alliance, as at December 2020.
We define sustainable investing as: inclusion, which involves
strategies that enhance portfolio exposure to better ESG
performers; thematic, where strategies provide exposure to
transformative environmental or social trends; and impact, which
are strategies linked to tangible societal or environmental
outcomes/impact.
We launched the Real Economy Green Investment Opportunity
('REGIO') fund with the IFC, and at December 2020 had raised $475m
to fund green projects in developing economies that reduce
emissions and meet the UN SDG Goals. Through our HGIF Lower Carbon
Equity and Bond Funds, which are available in nine Wealth and
Personal Banking markets and seven Global Private Banking markets,
we aim to help investors generate long-term total return with a
lower carbon footprint than reference benchmark indices. We
expanded our investment offering for private banking and wealth
clients, including: TPG Rise, an impact fund linked to the UN SDGs;
structured products and certificates of deposit where proceeds were
used to fund green and sustainable development projects; and
various thematic solutions such as gender equality and energy
transition.
As a signatory of the United Nations Environment Programme
Finance Initiative's Principles of Sustainable Insurance, our
insurance business has continued to implement its sustainability
policy. The policy includes restricting investments that may have
adverse impacts on people and the environment, and incorporating
ESG principles into our investment governance. We continued to
build our sustainable investment portfolios to support the UN SDGs
and the Paris Agreement. During 2020, we expanded the assets in
scope of the policy with full compliance due in early 2021.
Embedding ESG into our engagement
Our vision is to support our customers' aspirations to make a
positive change in the world through wealth value creation. We are
embedding ESG across client engagement and investment solutions in
our wealth management and private banking businesses.
We offer a comprehensive range of sustainable investment
products to help clients marry their sustainability and financial
goals. These include green, social and sustainability bonds,
investment funds, ETFs, discretionary mandates, private market
investments, structured products and green certificates of deposit.
Our advisory offering also covers securities with substantial
exposure to environmental themes.
To help customers understand the topic and the benefits of
investing sustainably, a range of educational materials, thought
leadership publications, and articles on sustainability themes are
distributed regularly. We partnered with the Principles for
Responsible Investment to develop a training programme for our
advisers, covering ESG fundamentals, investing strategies and
client engagement.
We provide our customers with ESG insights and foster industry
development. HSBC Global Research published over 200 climate and
ESG-related reports in 2020, accompanied by approximately 500
client meetings and 15 client webcasts. Our ESG team works in close
collaboration with analysts from other asset classes and across
markets, embedding sustainability into research and offering a
deeper integration approach to a global investor client base. The
team released four episodes of the ESG Brief podcast. ESG Insights
from HSBC Global Research are also repackaged for retail investors
as a series known as #WhyESGMatters.
Laying the foundations for a sustainable future
Cement is one of the world's most socially and economically
important materials - and also among the most highly carbon
intensive. Long-term change is needed to help cement producers
reduce their environmental impact. Switzerland-based LafargeHolcim,
one of the largest global cement producers, aims to lead its
industry in becoming greener.
We helped LafargeHolcim towards its goals by playing a major
role in the world's first building materials sustainability-linked
bond. We acted as joint bookrunner on the EUR850m
sustainability-linked bond, whose terms mean LafargeHolcim must pay
a premium if it does not meet its target to reduce the carbon
intensity of the cement it produces by 17.5% - from 2018 levels -
by 2030.
HSBC Holdings plc Annual Report and Accounts 2020 49
Unlocking climate solutions and innovations
We understand the need to find new solutions to increase the
pace of change if the world is to achieve the Paris Agreement's
goal of being net zero by 2050. We are working closely with a range
of partners to accelerate investment in natural resources,
technology and innovations, and sustainable infrastructure to
reduce emissions and address climate change.
Working with our partners
We know that many investors want to invest in companies that can
demonstrate their ESG credentials. Through philanthropy,
partnerships and new initiatives our aim is to help them invest in
protecting the planet, with HSBC Global Asset Management offering a
range of funds for clients to invest in businesses and projects
that have strong ESG track records and ambitions.
HSBC Global Asset Management also created a joint venture in
2020 with Pollination, a specialist climate change advisory and
investment firm. The joint venture, HSBC Pollination Climate Asset
Management, aims to be the world's largest manager of capital
invested in natural resources (see box below).
To encourage more investment in building sustainable
infrastructure, we are at the forefront of an initiative that gives
investors greater confidence about where their money is going.
Working with the IFC, OECD, the World Bank's Global Infrastructure
Facility and the Climate Policy Initiative, under the auspices of
the One Planet Lab, we helped conceive the FAST-Infra initiative.
Our collective aim is to turn sustainable infrastructure into a
mainstream asset class. We will aim to achieve this by establishing
a global labelling system that clearly shows investors the
infrastructure in which they are investing is sustainable and
contributes to achieving the UN's SDGs.
Backing new technology and innovations
Addressing climate change requires innovative ideas. By
connecting financing with fresh thinking, we can help climate
solutions to scale to support sustainable growth. Formed in 2020,
our $100m philanthropic climate programme aims to do this and truly
transform the way we protect our planet, overcoming barriers to
addressing climate change. We provided $7.1m to our
non-governmental organisation partners during the year to get the
programme underway.
We intend to expand our technology venture debt capabilities to
provide $100m of financing to companies developing clean
technologies that can be deployed at scale to support businesses
and households to transition to a low-carbon economy. We will
provide further updates on cleantech investment and the
philanthropic programme in 2021.
Skills for a sustainable future
We have a responsibility to invest in the long-term prosperity
of the communities where we operate. We recognise that technology
is developing at a rapid pace and that a range of new and different
skills are now needed to succeed. For this reason, much of our
focus is on programmes that develop employability and financial
capability. We also back climate solutions and innovation, and
contribute to disaster relief efforts based on need (see panel on
the right).
We also continue to increase knowledge on sustainability issues
with our people. We developed a seven-part online course
exclusively for our employees in partnership with the University of
Cambridge Institute for Sustainability Leadership. In 2020, our
colleagues completed more than 36,700 modules.
Investing in nature-based projects with Pollination
A key part of our strategy is to unlock new climate solutions,
helping to transform sustainable infrastructure into a global asset
class. As part of this ambition, we launched HSBC Pollination
Climate Asset Management in August 2020, with the vision to create
the world's largest dedicated natural capital investment manager.
The joint venture with Pollination, a specialist climate change
advisory and investment firm, intends to set up funds that will
invest in a range of nature-based projects that protect and enhance
nature over the long term, and reduce greenhouse emissions. The
intention is to launch a series of natural capital and carbon
credit funds for institutional investors, with the aim to launch
the first fund in mid-2021.
Our charitable contributions
In 2020, our charitable giving totalled $112.7m, including our
$25m Covid-19 donation fund. We also encourage our people to
volunteer time and share their skills, offering paid volunteer
days. In 2020, our colleagues gave over 82,000 hours to community
activities during work time.
In 2018, we set out a three-year goal to help two million people
in our communities be more employable and financially capable
through providing more than $100m in charitable donations. Current
projections from our charity partners indicate our support reached
more than four million people through donations of over $115m. This
funding helped marginalised young people prepare for and secure
their first jobs, supported indigenous people to complete their
education and gain employment, and helped migrant workers avoid
financial fraud. The increased reach from our initial projection is
due in part to increased reach from programmes moving online.
50 HSBC Holdings plc Annual Report and Accounts 2020
Our approach to sustainability policies
We recognise that businesses can have an impact on the
environment, individuals and communities around them. We have
developed, implemented and refined our approach to working with our
business customers to understand and manage these issues.
Our sustainability risk policies seek to ensure that the
financial services that we provide to customers do not contribute
to unacceptable impacts on people or the environment. We seek to
analyse the impact of ESG issues and follow international good
practice in these areas.
We believe that the key to managing sustainability risk is
creating partnerships with our customers, assisting them on their
transition path to a more sustainable and low-carbon economy.
Our policies
Our sustainability risk policies cover agricultural commodities,
chemicals, defence, energy, forestry, mining and metals, UNESCO
World Heritage Sites and Ramsar-designated wetlands.
These policies define our appetite for business in these sectors
and seek to encourage customers to meet good international
standards of practice. Where we identify activities that could
cause material negative impacts, we will only provide finance if we
can confirm customers are managing these risks responsibly. Such
customers are subject to greater due diligence and generally
require additional approval by sustainability risk specialists. We
will not provide finance if the business activities are not aligned
to our aims and values.
Our sustainability policies are being aligned with our approach
to climate risk as well as our net zero commitments, and will be
enhanced during 2021.
For further details on how we manage sustainability risk as well
as our full policies, see
www.hsbc.com/our-approach/risk-and-responsibility/sustainability-risk.
Supporting the transition
At the heart of our net zero plan is an aim to align our
financed emissions - emissions produced by our portfolio of
customers - to the Paris Agreement goal of net zero by 2050 or
sooner. The most significant contribution we can make is to support
our customers' transition to lowering carbon through transition
financing, which is financial support that helps heavy-emitting
companies take action to become more environmentally sustainable
over time.
To accelerate the global transition to net zero, we also want to
unlock climate solutions, such as cleantech innovation, sustainable
infrastructure and nature-based solutions. These will help smooth a
transition and shift to a more sustainable economy in the long
term. As we move closer to 2050, we expect our portfolio of
financed emissions to reflect this and our customers' business
activities to be less carbon intensive.
In that light, we are undertaking a review of our sustainability
risk policies to ensure that they will reflect this need to
transition and the phased reduction of carbon-intensive business
activities.
Governance
Within our Global Risk function, we have reputational and
sustainability risk specialists who are responsible for reviewing,
implementing and managing our sustainability risk policies as well
as our application of the Equator Principles. Our global network of
more than 75 sustainability risk managers supports the
implementation of these policies. In 2020, these local
sustainability risk managers were further supported by regional
reputational risk managers across the Group who have taken on
additional oversight responsibilities for sustainability risk.
We have also established a Sustainability Risk Oversight Forum,
made up of senior members of the Global Risk function and global
businesses across the Group.
Equator Principles
The Equator Principles provide a risk management framework for
determining, assessing and managing environmental and social risk
in projects. We were an early adopter of the principles in
2003.
In October 2020, the revised Equator Principles framework came
into effect, after consultation with member banks and external
stakeholders. In response to the launch of the revised framework,
we are rolling out updated training for staff in 2021 to ensure
that Equator Principles transactions are properly identified and
managed.
We report annually on the transactions completed under the
principles. Our latest Equator Principles report is available at:
www.hsbc.com/who-we-are/our-climate-strategy/sustainability-risk/equator-principles.
For further details of our approach to human rights, see page
71.
For further details of our approach to risk management, see page
37.
Our energy policy
When we last updated our energy policy in 2018, we stated that
we would not finance any new coal-fired power plants, with the
potential targeted and time-limited exceptions in Bangladesh,
Indonesia and Vietnam, recognising the need to balance local
humanitarian needs with the need to transition to a low-carbon
economy.
We therefore agreed that any funding of new coal-fired power
plants in those three countries would only be considered subject to
certain strict criteria. It is important to note that we have not
provided any project finance for any new coal-fired power plants
anywhere in the world since then, including those countries.
In April 2020, we removed these exceptions and will not finance
any new coal-fired power plants anywhere globally. We continue to
support the other needs of our customers in these countries and
continue to support their governments.
Within the power and utilities, and metals and mining sectors
shown in our TCFD disclosures on page 19, our direct exposure to
thermal coal is 0.2% of the wholesale loans and advances
figures.
HSBC Holdings plc Annual Report and Accounts 2020 51
Customers
We are bringing the benefits of connectivity and a global
economy to more people around the world.
At a glance
Our relationship
We create value by providing the products and services our
customers need and aim to do so in a way that fits seamlessly into
their lives. This helps us to build long-lasting relationships with
our customers. We maintain trust by striving to protect our
customers' data and information, and delivering fair outcomes for
them. If things do go wrong, we aim to take action in a timely
manner.
Operating with high standards of conduct is central to our
long-term success and underpins our ability to serve our
customers.
In this section, we report on our customers as three distinct
groups: our wealth and personal banking customers; medium and
large-sized corporate customers; and our global and institutional
customers. These groups are served by our three global businesses
respectively: Wealth and Personal Banking ('WPB'), Commercial
Banking ('CMB') and Global Banking and Markets ('GBM').
Digital and technology
Our retail and wholesale customers are using digital services
more than ever before, with the Covid-19 outbreak accelerating the
shift to digital banking. We have continued to invest in digital
and technology to help make banking simpler and safer, and have
launched new products and platforms to assist and support our
customers.
-- Read more on digital and technology on page 53.
Customer satisfaction
Through a series of surveys, we aim to listen to our customers
to put them at the centre of our decision making. We continued to
redesign how we receive feedback to create a consistent measure of
the customer experience and act on customers' feedback. While the
roll-out of the full programme was slowed during the Covid-19
outbreak, we continue to embed the new ways of working .
-- Read more on customer satisfaction on page 54.
How we listen
We aim to be open and consistent in how we track, record and
manage complaints. In 2020, complaints fell across our WPB and GBM
businesses and were up overall in CMB. Complaint resolution was
impacted by staffing challenges from the Covid-19 pandemic, while
corporate complaints were focused on account opening and operations
due to increased demand for finance.
-- Read more on how we listen on page 56.
Conduct
We responded to the changing environment and sought to help our
customers, particularly the most vulnerable, with payment relief
measures, lending support and improvements to our products and
services. The conduct of our people is linked to the way we work.
We adapted our global training and support for our colleagues,
updated how we design products and deliver fair value, and
continued to help customers transition from interbank offered
rates.
-- Read more on conduct on page 58.
52 HSBC Holdings plc Annual Report and Accounts 2020
Digital and technology
The Covid-19 outbreak meant that many of our customers needed to
increasingly use our services remotely. The significant technology
investments we made in the years before the pandemic to make
digital banking easier meant we could support the accelerated shift
to mobile and online channels during 2020.
In 2020, more than nine out of every 10, or 92.7%, of our global
personal banking transactions were done digitally, an increase of
four points year-on-year. At the same time, 54% of our retail
customers were digitally active, an increase of five points from
2019.
Our corporate customers also increased their use of our digital
services, with mobile app downloads of our core business digital
platform, HSBCnet, growing 146% in 2020.
Throughout the Covid-19 outbreak, we continued to invest in
technology to help our customers to do more of their everyday
banking online, and we rolled out new functionality to support them
through the pandemic and provide digital solutions for their growth
ambitions.
Making banking simpler and faster
During 2020, we completed the initial roll-out of new online
banking and mobile platforms for our retail customers, replacing
legacy technology across 16 markets, which will let us innovate
more quickly in the future.
In 2020, the retail mobile banking app achieved an average Apple
rating of 4.8 in the UK and 4.7 in Hong Kong, and an average
Android rating of 3.8 in the UK and 3.5 in Hong Kong.
We helped many customers in need of support during the economic
slowdown. On average we deployed digital lending portals within six
days for business customers to be able to apply for government
lending schemes in the UK, the US and Hong Kong.
As it has been more difficult to meet in person, we introduced
customer video meetings for all business areas across 47 markets.
We also continued to expand the use of chatbots to support
customers with day-to-day queries. In WPB, we launched online and
in-app chat services across eight new markets and there were more
than 10.5 million chat conversations in 2020.
For our clients with wealth management needs we launched a
simplified version of Wealth View, an online platform enabling
easier analysis of their holdings and transactions. It is available
in Hong Kong, Singapore, Luxembourg, the UK, Channel Islands and
the US.
Our improved global online Business Banking Experience, used by
more than 49,000 businesses across nine markets, helps customers to
complete everyday banking tasks themselves and run their businesses
remotely. It has an average customer satisfaction score of 9 out of
10.
Helping businesses to grow
We continue to transform our digital platform for Global Trade
and Receivables Finance, HSBC Trade Solutions. We launched trade
finance and risk mitigation solutions to 2,100 customers in Hong
Kong in November 2020, making trade simpler, safer and faster.
In the UK, HSBC Kinetic, a new mobile proposition for SMEs, had
2,899 customers onboarded by the end of 2020. Launched in June
2020, it enables customers who need a business current account or a
Business Bounceback loan from the UK Government to apply online and
do their day-to-day banking digitally.
In GBM, we are investing heavily in digital and data
capabilities to support our clients' growth ambitions and
accelerated digital needs. In Securities Services, we are
developing solutions to provide clients with fast access to data,
and more control of their assets and transactions. The monthly
usage of our API suite, which gives on-demand access to data, grew
2,716% in the year to December 2020, with a significant increase in
committed customers.
To help make HSBC even more secure, we provide a front-end
digital know-your-customer solution via our SmartServe platform,
which has been launched in 20 countries and territories, including
the UK, UAE, the US, Hong Kong and France.
For further details of our digital satisfaction scores, see page
54.
For further details of new features we introduced to give people
more control over their financial lives during the Covid-19
outbreak, see page 58.
Harnessing the benefits of blockchain
We are implementing distributed ledger technology, including
blockchain, to improve efficiency, transparency and security for
clients. In global trade, we are using the technology to replace
the previously paper-driven letter of credit process, which are the
documents guaranteeing the seller will be paid. It offers a fast
and secure alternative, which is helping reduce letters of credit
processing time from between five and 10 days to a matter of
hours.
151%
Year-on-year increase in wholesale customer mobile payments
during 2020.
92.7%
Retail banking transactions globally that were digital at the
end of 2020.
119,782
Downloads of the HSBCnet mobile app in 2020, a 146% year-on-year
increase.
HSBC Holdings plc Annual Report and Accounts 2020 53
Customer satisfaction
We are continuing to redesign how we receive feedback from our
customers to put them at the centre of decision making.
In 2019, we said we wanted to measure the likelihood of
customers to recommend HSBC across our global businesses, and we
now have this consistent measure of our customer experience to help
engage our people and improve how we benchmark our performance
internally and against our competitors.
Our transition to a new feedback system
What we are trying to achieve goes beyond just a measure. It is
a way of systematically collecting, analysing and acting on our
customers' feedback. Across our global businesses, it will help us
get better insight from our customers, build stronger relationships
with them, and identify and prioritise areas where we can improve
the experience they have with us.
Through a series of surveys, we ensure we are listening to our
customers and creating insights at all levels of the relationship.
We create more transparency of the customer experience by sharing
feedback directly with our customer-facing teams and allowing them
to respond directly to those customers to address specific
feedback.
The metric that underpins this new system is the net promoter
score based on the question: 'On a scale on 0 to 10, how likely is
it that you would recommend HSBC to a friend or colleague?' The
score is calculated by subtracting the percentage of 'detractors',
who provide a score of 0 to 6, from the percentage of 'promoters',
who provide a score of 9 to 10. It can range as low as -100 to as
high as 100.
Although the roll-out of the full programme was slowed during
the Covid-19 outbreak, as we redirected resources to ensure our
front-line teams could focus on delivering for our customers, we
continue to embed the new ways of working. In 2020, WPB launched
more than 157 new surveys across 15 markets. In CMB, we launched
elements of our programme in the UK, the US, Canada, Mexico and
India, with more than 30 markets planned for 2021. Our GBM business
is also continually working on ways to collect valuable feedback
and improve customer experience. In 2020, we started conducting
post-implementation assessments through questionnaires, which
provide useful insights on our performance.
How we fared
In 2017, we set ourselves the strategic targets to improve
customer satisfaction in our WPB and CMB global businesses by 2020.
Both businesses achieved high levels of satisfaction in the
majority of their respective 'scale markets', although were unable
to fully achieve their 2020 ambitions to be either ranked as top
three against relevant competitors in these markets, or to have
improved by at least two ranks compared with their 2017
baselines.
Our WPB business, which surveyed more than one million customers
on their likelihood to recommend HSBC and their satisfaction with
our services, achieved its target in seven of our eight scale
markets in 2020. Overall, our ranking fell below ambition in
Malaysia, despite our rank position improving during 2020. Our
lower performance than target was largely due to 'the ease of
banking with us' compared with our competitors. We are carrying out
several initiatives to improve its performance, including the
release of new digital features, staff training and a refresh of
our customer propositions.
In surveys that we largely conducted of customers' views of our
specific services and channels, increased market attention,
geopolitical tensions and market volatility impacted scores in
mainland China. This trend began to reverse due in part to enhanced
customer communications and a greater emphasis on digital
assistance. For our relationship manager scores, we noted
performance below expectations in France, where we have ongoing
action plans to improve communications and drive more proactive
contact with customers.
In our private bank, our global net promoter score fell to nine
in 2020, compared with 24 in the previous year, largely due to a
decline in Hong Kong and Switzerland. However, our scores improved
in Singapore and in France. We achieved strong scores for our
relationship management services, and our approach to coping with
the Covid-19 outbreak was commended in many markets. Key areas
where our clients would like us to improve were our digital and
advisory offerings, on which we are focusing significant
investment.
In CMB, five out of eight tracked markets met targets by
improving their rank position by two places from 2017 or being in
the top three against competitors, which were Hong Kong, the UAE,
the Pearl River Delta, Singapore and Saudi Arabia in 2020. We
declined to fifth position in the UK, as we deployed staff to
Covid-19-related lending schemes impacting customer experience in
telephony and specialist availability in branches. Our rank in
Mexico remained unchanged at fifth. Similarly, in Malaysia, our
position remained unchanged at sixth, notwithstanding improvement
in underlying satisfaction scores.
In GBM, our aim is to outperform the average competitor score.
To measure this, each year we partner with Greenwich Associates to
conduct a relationship level satisfaction survey. In 2020, we
achieved an overall net promoter score of 48, outperforming our
competitors' score of 39. We scored 49 in Asia-Pacific, compared
with 32 for our competitors, and 44 in the Europe and Middle East
region, compared with 41 for our competitors. However, we scored 54
in North America, below our competitors' score of 73.
Digital channels
Our customers have increasingly turned to our digital services
in recent years, a trend which was accelerated in 2020 due to the
Covid-19 outbreak. We launched new capabilities and digital
enhancements in each of our global businesses to be closer to our
customers and support them during the pandemic.
In WPB, we were able to maintain robust performance in our
digital channels, with an improvement in scores in online banking
in almost all markets compared with 2019.
7 out of 8
WPB markets sustained top-three rank and/or improved in customer
satisfaction.
5 out of 8
CMB markets sustained top-three rank and/or improved in customer
satisfaction.
48
GBM's overall net promoter score, outperforming competitors'
score of 39.
54 HSBC Holdings plc Annual Report and Accounts 2020
This reflects the success of new mobile app functionality in the
UK, including balance after bills forecasting, direct debits and
standing orders cancellation and in-app overdraft limit management.
Customers in the US, Canada and the UK gained a view of pending
transactions, while in Hong Kong and UAE we added block and unblock
cards capability. We introduced digital secure key access and pay
by instalment in Singapore and Malaysia, and launched our HSBC Life
Well+ in-app wellness and lifestyle programme in Hong Kong.
We faced a temporary technical issue related to Bill Pay, a
service that allows our US customers to pay third-party bills
online. This affected our digital banking scores, but they
rebounded once this was resolved.
In CMB, customer satisfaction with our digital services improved
in six of the seven markets assessed compared with 2019, which were
Hong Kong, the UAE, Singapore, Malaysia, Mexico and the Pearl River
Delta. However, it fell in the UK, as the significant increase in
Covid-19-related lending schemes negatively impacted turnaround
times and our customers' perception of our digital services.
Despite the difficulties of operating during the Covid-19
outbreak, technology enhancements introduced during 2020 increased
our interactions with our customers, helping us to provide
solutions to their problems, and contributed to performing at
industry best practice levels in our Global Liquidity and Capital
Management and Global Trade and Receivables Finance businesses.
All of our relationship managers were enabled to work remotely
to support customers from home. We introduced digital capabilities
that were particularly relevant in key markets, including remote
cheque deposits, a one-hour turnaround of shipping guarantees and a
dedicated trade finance helpline in the UK, and electronic signing
for key product onboarding in Hong Kong. Improvements to our
digital tools contributed to a 146% year-on-year increase in
customer downloads of HSBCnet mobile in 2020 compared with 2019.
Active desktop users increased from 400,000 to more than
470,000.
In GBM, the overall satisfaction with our digital proposition
was strong with 64% satisfaction globally, and well ahead of
competition in the Asia-Pacific, and Europe, Middle East and Africa
regions, according to our relationship level satisfaction survey.
Our scores were only slightly above our competitors' score in North
America. Feedback from clients showed we needed to reduce the
complexity associated with our systems and procedures. To address
this, we are shifting towards the use of technology in our
processes, helping to remove unnecessary layers while increasing
efficiency. In 2020, we began the roll-out to a small set of
customers of HSBC SmartServe, an automated centralised service that
aims to help clients onboard digitally and use services with fewer
manual transactions.
We also now offer customers the opportunity to sign
documentation electronically for credit and lending, with this
service live in 22 countries at December 2020. We have also begun
rolling out new soft token security solutions.
Providing support in challenging times
While we have invested in digital and technology, it has been
important to provide effective access to support our vulnerable
personal customers in our other channels during the Covid-19
outbreak.
Conditions have been challenging for in-person interactions at
retail branches and with relationship managers, which hindered
performance in some markets, such as in Mexico, where a portion of
our branches remained closed until August 2020. This affected wait
times and staffing at open branches.
Our WPB contact centres recorded strong scores during 2020.
In the UK, our WPB business issued new telephone security
numbers to 1.6 million non-digitally active customers. We also
created a customer line for key workers and vulnerable customers,
supporting more than 1.67 million customers in 2020 through our
contact centres.
WPB customer satisfaction by channel
(Net promoter score(1) )
Hong
UK Kong
2020 2019 2020 2019
------------------ --- ---- ---- ----- ----
Branch -> 62 62 57 42
------------------ --- ---- ----
Contact centre(2) 39 36 -> 57 57
----------------------- ---- ----
Online banking 48 41 4 2
----------------------- ---- ----
Relationship
manager 58 45 49 25
1 The net promoter score is measured by subtracting the
percentage of 'detractors' from the percentage of 'promoters'.
'Detractors' are customers who provide a score of 0 to 6, and
'promoters' are customers who provide a score of 9 to 10 to the
question: 'On a scale on 0 to 10, how likely is it that you would
recommend HSBC to a friend or colleague'.
2 Hong Kong benchmark data for 2019 is unavailable as the survey
methodology changed. The data reported for 2019 is based on January
2020.
HSBC Holdings plc Annual Report and Accounts 2020 55
How we listen
To improve how we serve our customers, we must be open to
feedback and acknowledge when things go wrong. This was especially
true during periods of Covid-19-related lockdown restrictions when
our customers encountered new challenges and we needed to adapt
quickly.
We aim to be open and consistent in how we track, record and
manage complaints, although as we serve a wide range of customers -
from personal banking and wealth customers to large corporates,
institutions and governments - we tailor our approach in each of
our global businesses.
When things go wrong
In 2020, our WPB business received just over one million
complaints from customers. The ratio of complaints per 1,000
customers per month in our large markets reduced from 3.7 to
2.6.
During the year, 73% of complaints were resolved on the same or
next working day, a decline from 77% in 2019, and 80% were resolved
within five working days, compared with 83% in 2019. Complaint
resolution was impacted predominantly due to staffing challenges
caused by the Covid-19 outbreak, and by our focus on ensuring our
customers were served safely during this difficult time.
The reduction in complaints in the UK was driven in part by the
end of the payment protection insurance ('PPI') complaints
programme in 2019. Our customers also demonstrated a high level of
understanding of our Covid-19-related challenges. The increase in
complaints in Hong Kong was related to operational stresses due to
external events, such as the Covid-19 outbreak, economic relief
measures, social-political sentiments and investment market
activities. We are addressing these by equipping our colleagues
with home working capabilities, offering flexible solutions and
enhanced digital solutions to improve our customer servicing
capabilities. In the fourth quarter of 2020, we succeeded in
bringing down the number of complaints by 13% from its peak during
June to September.
In our private bank in 2020, we received 572 complaints, an 8%
increase on 2019. Administration and servicing issues remained the
largest contributor of complaint categories, at 79% in total.
Complaints linked to product and performance as well as advice and
suitability were higher than in the previous year. This was largely
attributable to complaints indirectly linked to the Covid-19
outbreak.
In 2020, the private bank resolved 557 complaints, which was a
14% increase from 2019. We upheld 270 complaints, which was a 3%
increase on 2019.
Our CMB business resolved 105,215 customer complaints in 2020, a
14% increase from 2019. Of the overall volumes, 78% came from the
UK, 16% from Hong Kong and 1% from France.
The highest sources of complaints involved operations and
account opening. This was due to the unprecedented demand from
customers for funding and finance during the Covid-19 outbreak
through government lending schemes and other relief measures, which
resulted in account opening delays and increased call handling
times. Recognising the impact on our customers, we increased
automation in our loan application process, extended repayment
holidays and improved processes to escalate and prioritise
vulnerable customers. We also redeployed resources to support
increases in call volumes in key customer support functions.
Complaints on operations fell compared with the previous year.
However, based on customer feedback, we are continuing to implement
changes to reduce payment processing errors and delays, most
notably in the UK and in Hong Kong with several digital business
banking enhancements, including payment notification services.
An overall increase in the number of complaints in Hong Kong was
largely attributed to the adoption of a more prudent complaints
definition. This resulted in a substantial increase in March 2020,
although it stabilised from July 2020.
WPB complaint volumes(1) (per 1,000 customers per month)
2020 2019
---------- --- ---- ----
UK 2.1 4.5
--------------- ---- ----
Hong Kong 0.6 0.5
--------------- ---- ----
France 6.8 7.8
--------------- ---- ----
US 2.8 2.9
--------------- ---- ----
Canada 3.8 3.9
--------------- ---- ----
Mexico 4.9 5.7
--------------- ---- ----
Singapore 1.4 1.3
--------------- ---- ----
Malaysia 0.5 0.6
--------------- ---- ----
Mainland
China -> 0.6 0.6
---------- --- ---- ----
UAE 4.5 5.1
1 A complaint is defined as any expression of dissatisfaction,
whether upheld or not, from (or on behalf of) a former, existing or
prospective customer relating to the provision of, or failure to
provide, a specific product or service activity.
CMB complaint volumes(2) (000s)
2020 2019
--------------------- ---- ----
UK(2) 81.9 78.8
---------------------- ---- ----
Hong Kong 16.4 5.4
---------------------- ---- ----
Europe 2.4 2.7
---------------------- ---- ----
Latin America 1 1.3
---------------------- ---- ----
US 0.9 1.2
---------------------- ---- ----
Middle East,
North Africa
and Turkey 1.2 1.5
---------------------- ---- ----
Rest of Asia-Pacific
(excluding
Hong Kong) 0.9 0.8
---------------------- ---- ----
Canada 0.5 0.8
---------------------- ---- ----
2 Volumes for the UK are received complaints from eligible
complaints aligned to the current FCA reporting requirements.
Volume of complaints for all other markets, complaint reason
breakdown and commentary are based on total volumes of resolved
complaints.
56 HSBC Holdings plc Annual Report and Accounts 2020
Our GBM business received 1,432 customer complaints, which
represented a 14% decline compared with 2019, despite the increased
transaction volumes during the Covid-19 outbreak in 2020. Our
Global Liquidity and Cash Management business received the most
complaints of GBM businesses. This corresponds to the nature of the
business and the high volume of transactions processed daily.
Despite increased demands as a result of the Covid-19 pandemic,
Global Liquidity and Cash Management demonstrated resilience to
major shocks and had a reduced number of complaints compared with
2019.
Capturing feedback
We listen to complaints to address customers' concerns and
understand where we can improve processes, procedures and
systems.
In 2020, we continued to focus on staff training in each of our
global businesses and emphasise the importance of recording
complaints. This is intended to improve our complaint handling
expertise and help ensure our customers are provided with fair
outcomes. Complaints are monitored and reported to governance
forums to ensure they are handled quickly and thoroughly.
In our WPB business, we are using our new complaints management
platform, which we set up in 2018, in seven markets, allowing us to
deliver a more customer-focused experience when managing feedback.
We have been able to streamline the complaints process by
simplifying complaints forms and procedures, and integrating with
our back-end systems. We introduced greater automation to track
complaints from beginning to end and provide customers with regular
updates. We also enhanced our reporting so we can spot trends and
fix emerging issues more quickly.
We have also continued our efforts to improve the way we capture
and report on customer complaints in our wholesale businesses. We
are now piloting a single, overarching tool to gather customer
feedback for parts of our wholesale businesses. The tool enables
customer complaints to be recorded by customer-facing employees
across GBM in four sites and CMB in one site. This holistic
approach helps ensure consistent handling of complaints and fair
outcomes for customers. It also makes it easier to identify a clear
root cause for each complaint, allowing detailed thematic analysis,
faster resolution and more efficient reporting. In 2021, we plan to
expand the scope of the tool and use it in the majority of
countries and territories in which we operate.
.
GBM complaint volumes(1)
2020 2019
--------------------- ----- ----
Global Banking 309 340
---------------------- ----- ----
Global Markets and
Securities Services 363 409
---------------------- ----- ----
Global Liquidity and
Cash Management(2) 760 919
---------------------- ----- ----
Total 1,432 1668
1 A complaint is defined as any expression of dissatisfaction,
whether upheld/justified or not, from (or on behalf of) a client
relating to the provision of, or failure to provide, a specific
product or service activity.
2 Global Liquidity and Cash Management excludes 1,175 complaints
relating to payment operations, which is part of Digital Business
Services.
WPB top complaint categories (% of total)
2020 2019
----------------- ----
Process and
procedures 43 33
----------------- ----
Product features
and policy 7 5
----------------- ----
Service 25 24
----------------- ----
Fees, rates
and charges 9 9
Other(1) 16 29
CMB top complaint categories (% of total)
2020 2019
-------------------- ----
Processes and
procedures (global
standards) 8 27
--------------------
Operations 25 26
-------------------- ----
Internet banking 8 8
-------------------- ----
Contact centre 11 6
-------------------- ----
Fees, rates
and charges 5 5
-------------------- ----
Credit risk
decisions 4 3
-------------------- ----
Account opening 23 4
-------------------- ----
Other(1) 16 22
GBM top complaint categories (% of total)
2020 2019
------------ ----
Process 41% 34%
------------ ----
Systems and
data 21% 29%
------------ ----
People 20% 21%
------------ ----
Other(1) 18% 16%
1 'Other' in WPB includes issues related to underwriting
decisions, claims, personal data privacy, global standards; in CMB,
it refers to a wide range of issues, including service closures and
mobile banking; and in GBM it includes complaints in relation to
third parties, as well as legislative and regulatory changes.
HSBC Holdings plc Annual Report and Accounts 2020 57
Conduct
We are committed to providing customers with products that meet
their needs. Good conduct at HSBC means that we deliver fair
outcomes for customers, and maintain the orderly and transparent
operation of financial markets
In this section, we address how we endeavoured to help our
customers in each of our global businesses during a difficult year,
which included the global Covid-19 pandemic.
Supporting our customers responsibly
We responded rapidly to the changing environment caused by the
Covid-19 outbreak and revised our internal policies and procedures
to help our customers - especially the most vulnerable - fairly and
safely.
Many of our personal banking and wealth customers needed
financial relief as a result of the economic slowdown caused by the
Covid-19 outbreak, which we sought to address in a responsible way.
At 31 December 2020, we had active payment relief measures
impacting 87,000 accounts and $5.5bn in balances as part of
market-wide schemes and our own payment holidays programmes. This
consisted of $4.7bn of mortgage balances and $850m of other
personal loans in repayment relief, compared with $21.1bn of
mortgage balances and $5.2bn of other personal loans at the end of
June 2020. To ensure customers were financially prepared, we
followed local government guidelines. In the UK, we extended the
payment relief scheme into March 2021 for customers who have not
had a payment holiday, in line with local furlough timeframes.
In select markets, we used our digital messaging capabilities to
inform customers about available financial help to reach more
people more quickly. We also made the payment relief applications
available online and offered support to customers through our chat
functions, to enable a quick turnaround of payment relief requests.
We responded quickly and flexibly to change our products for
customers, adding insurance coverage for people whose health had
been affected by Covid-19 in Hong Kong, mainland China, Singapore
and Mexico, and extended the grace period for premium payment
deferral in these countries as well as in France, the UK and
Argentina.
While our digital services can support many of our customers, we
were proactive in supporting the most vulnerable. In the UK, we
identified customers who were at risk of being vulnerable during
the Covid-19 outbreak, and conducted 565,780 outbound care calls to
update them on safe options to access banking services, including
access to emergency cash and the available payment relief
options.
Global and country operational teams transitioned resources to
homeworking throughout the period to ensure customer service levels
were maintained with minimal disruption. Flexible resourcing and
training was undertaken to allow staff to move from branches to
call centres to support customers.
Seeking solutions with our 'Covid bundle'
We aimed to reach more of our personal and wealth customers in
innovative ways during the Covid-19 outbreak, which contributed to
higher demand for banking services due to its economic impact. Our
'Covid bundle' project aimed to support our customers in our most
affected markets through new features, capabilities and
initiatives. In addition to providing customers in financial need a
variety of payment options, we upgraded our telephony services and
conversational capabilities on mobile and web chat to improve how
we routed queries on forbearance and collections to our relevant
front-line colleagues. This helped support our customers more
quickly and mitigate the increased demand on our other front-line
operational colleagues.
17
Number of major markets where we introduced payment relief
measures for our personal and wealth customers.
> 237,000
Wholesale customers supported globally with $35.3bn of lending
through both government schemes and our own initiatives at the end
of 2020
21,000
GBM colleagues who completed virtual conduct training in
2020.
58 HSBC Holdings plc Annual Report and Accounts 2020
Prior to the Covid-19 outbreak, we increased our focus on
identifying vulnerable customers in the UK, but this meant that our
teams who service vulnerable customers in financial difficulty
became much busier, resulting in a backlog of customer requests. In
response, we added more staff to these teams, trained them and are
working to resolve the backlog.
We also focused on training and coaching our customer-facing
colleagues to meet the needs of customers who were made vulnerable
due to having difficulties making payments.
Responding to business needs
Our CMB and GBM businesses introduced several measures to
support our customers, many of whom faced pressures in their
finances as lockdown restrictions impacted their businesses. As at
the end of 2020, the lending support we provided to more than
237,000 wholesale customers globally was valued at $35.3bn, both
through government schemes and our own initiatives. We offered
repayment holidays to help businesses respond to cash flow
pressures and provided trade finance solutions to support customers
with their supply chains.
We launched online portals for customer applications to various
government-initiated loan schemes, and set up a global team to help
oversee the provision of the loans, expediting the turnaround of
loan requests and getting funds to our customers quicker. In the
UK, a dedicated Covid-19-related phone line supported our customers
by conveying what financial guidance and support is available to
them. In order to help identify and mitigate any potential fraud
associated with the Bounce Bank Loan Scheme, our UK Commercial
Banking business is also part of an industry-wide fraud
collaboration working group, which has been set up by UK Finance
and includes other lenders and government bodies.
In our GBM business, we focused on making responsible lending
decisions and extending credit to corporate and institutional
customers. We also sought to protect the integrity and flow of both
internal and customer data, while maintaining an operationally
resilient infrastructure. Relationship managers were in regular
contact with customers, helping to ensure they received the most
suitable support for their business.
Our Global Liquidity and Cash Management business, which helps
our corporate clients access, manage and move their cash, provided
urgent payment facilities to mobilise clients' cash where it was
needed most, and helped them move rapidly to digital solutions.
This included fast-tracking payments for urgent medical supplies
from China to hospitals in Italy and enabling cashless, socially
distanced payments for drive-through testing sites in Malaysia.
Global Liquidity and Cash Management also launched a green deposit
proposition during 2020 in the UK, Singapore and India, which
involved allowing treasurers to make deposits that we use to
finance environmentally beneficial initiatives, such as renewable
energy and energy efficient projects.
Our Markets and Securities Services business provided additional
guidance around pricing decisions in 2020, in light of heightened
credit risk and remote working arrangements. We put in place
measures and guidelines to help ensure information continues to be
monitored effectively and controlled in the new working
environment.
While working remotely, our Global Research team enhanced its
review processes to provide timely research on economics,
currencies, fixed income and equities, helping our institutional,
government, corporate and central bank clients, as well as
colleagues, navigate the extremely complex and fast-moving
situation. We also increased the number of research products made
freely available to help those affected by the crisis on a wide
variety of platforms.
Digital support
We continued to invest in our digital services and tools to
support our customers and colleagues, delivering initiatives to
make banking with us simpler and more efficient, and we made
greater use of online appointments and video calls to enable our
workforce to work from home.
We launched new features in each of our businesses so we could
handle crucial everyday activities remotely, such as
onboarding.
In WPB, new digital features included allowing customers to
activate cards and cancel regular payments through our mobile apps
in select markets. Our CMB and GBM businesses each enabled key
documents to be sent and received with paperless instructions,
enabling digital sign-offs and eliminating the need for physical
signatures.
We also rolled out globally our digital platform 'Vital
Insights' in CMB following a pilot in Asia-Pacific, which helped
enable us to understand the impact of Covid-19 on our customers and
to take relevant action to help them manage uncertainty.
Conduct of our colleagues
The conduct of our people is inextricably linked to the way we
work.
In WPB, in response to the Covid-19 outbreak, we adapted and
reprioritised global training, and rolled out well-being programmes
and tools, such as coaching plans to support virtual working to
ensure our teams had the resources they needed to work safely and
productively.
We also remodelled our incentive programme scorecards to allow
for flexibility, to help our colleagues focus on our customer
needs, ensuring they can provide the appropriate solutions as a
result of the pandemic.
In our CMB and GBM businesses, we issued guidance to our
colleagues on remote working to help maintain high standards of
conduct, adhere to competition law, and manage potential conflicts
of interest.
In GBM, classroom-based conduct training was adapted for virtual
learning, with more than 21,000 colleagues completing the
curriculum in 2020. Cultivating a positive working culture is
central to the well-being of our colleagues and the performance of
our business. We introduced culture ambassadors, set up new
communication channels for interactions with senior management, and
established various well-being programmes.
HSBC Holdings plc Annual Report and Accounts 2020 59
Delivering fair outcomes with our products
We are committed to providing customers with products that meet
their needs. We have policies and procedures to help deliver fair
outcomes for our customers, and to maintain orderly and transparent
financial markets. Conduct principles are embedded into the way we
develop, distribute, structure and execute products and services.
We are refreshing our approach to conduct arrangements across the
Group with a view to ensuring that the arrangements remain
appropriate for the nature of our business.
Product design and development
Our approach to product design and development entails the
following overarching principles:
-- We offer a carefully selected range of products that are
continually reviewed to help ensure they remain relevant in each
country they are offered and perform in line with expectations we
have set. Where products do not meet our customers' needs or no
longer meet our high standards, improvements are made or they are
withdrawn from sale.
-- Wherever possible, we act on feedback from our customers to
provide better and more accessible products and services.
-- We complete regular assessments of our products to help
ensure we continue to deliver fair value.
Oversight of product design and sales governance for each of our
global businesses is provided by governance committees chaired and
attended by senior executives who are accountable for ensuring we
manage our related non-financial risks appropriately, within
appetite and in a manner designed to ensure fair customer
outcomes.
Our CMB business considers customer feedback and user groups in
its product development and has invested in the development of a
new global product inventory and lifecycle management system to
help ensure optimal product governance. The system uses Cloud
technology to provide an improved way of managing our products from
approval through to demise, and has been successfully piloted in
our Global Trade and Receivables Finance and Global Liquidity and
Cash Management businesses. The system, which we plan to deploy to
all CMB markets within 2021, will help us to bring appropriate
products to market more quickly, as well as helping to ensure we
can more easily demonstrate fair customer outcomes.
In our GBM business, we made strides to further improve pricing
transparency. We launched the first phase of our strategic foreign
exchange margin management tool across 1.1 million wholesale
customers in Singapore, the UAE, Australia and the UK. The tool
provides customers who make or receive payments that require
foreign exchange conversion with consistent pricing and improved
transparency of information across our various banking
channels.
Transitioning away from Ibors
As a result of the planned cessation of the London interbank
offered rates ('Libor'), Euro Overnight Index Average ('Eonia') and
other benchmarks actively known as Ibors, we are ensuring that we
have the product capability in place to support our customers on
the transition to alternative rates. We aim to clearly outline the
options available to our customers holding existing Libor-based
products, and our commercial strategy is designed to minimise value
transfer when transitioning their products from Libor to
alternative rates.
In October 2020, we launched loans using the Sterling Overnight
Index Average ('Sonia') benchmark administered by the Bank of
England, which means that customers wanting to borrow on sterling
Libor now have the option to borrow against Sonia instead.
We began offering Secured Overnight Financing Rate ('SOFR')
loans as an alternative to US dollar Libor in the US, Hong Kong and
the UK in 2020. Further products, notably derivatives, and country
roll-outs are scheduled in 2021.
For further details on the transition from Ibors, see 'Ibor
transition' in the Risk section on page 112.
60 HSBC Holdings plc Annual Report and Accounts 2020
Ensuring sales quality
In our WPB business, to help ensure the quality of our sales
process and our colleagues' behaviour in each of our markets, we
conduct a mystery shopping programme and/or a sales quality
programme. Issues identified are treated seriously.
We will take action to help achieve a fair outcome for our
customers. Where concerns are found, we will contact the customer
to apologise, explain and remediate. Depending on the severity of
the issue, the relevant employee will be given enhanced training to
improve their behaviour and they may become ineligible for an
incentive reward payment. Where a case of misconduct occurs,
disciplinary action may be taken, which can lead to dismissal.
In CMB, for our smaller business clients, we operate sales
outcomes testing in 12 markets to ensure we correctly explain
important product features, pricing, risks and benefits. In 2020,
we identified 65 issues related to documentation, sales process and
pricing, as well as some wrong customer outcomes. We ensured
appropriate customer remediation took place along with the
necessary internal action to resolve the situation. We plan to
expand sales outcome testing to a further six sites in 2021.
Meeting our customers' needs
We have robust oversight of the sales process, which aims to
meet our customers' needs effectively. This involves reviewing the
ongoing suitability of the products and services we offer and
monitoring sales quality as well as examining how we incentivise
our colleagues (see box below).
In our WPB business, we consider our customers' financial needs
and personal circumstances to assist us in offering suitable
product recommendations. This is achieved through:
-- a globally consistent methodology to rate the riskiness of
investment products, which is customised for local regulatory
requirements;
-- a thorough customer risk profiling methodology to help assess
customers' financial objectives, attitude towards risk, financial
ability to bear investment risk, and their knowledge and
experience;
-- robust testing during the design and development of a product
to help ensure there is a clearly identifiable need in the market;
and
-- consistent standards to follow when we provide advice to our
customers, while taking into account local regulations.
We realise that some circumstances can put customers in a
vulnerable position, so we are training our colleagues to recognise
and treat these individuals fairly.
Given the varying levels of customer sophistication and
associated exposure to vulnerability in our CMB business, in 2020
we developed a globally consistent approach to ensure we can more
effectively identify and support customers who are deemed
potentially vulnerable, with a particular focus on sole traders and
small and medium-sized enterprises.
Lessons learned from the FX DPA
In 2018, we entered into a three-year deferred prosecution
agreement with the US Department of Justice arising from its
investigation into HSBC's historical foreign exchange activities
('FX DPA'). Since then, we have significantly raised our standards
of conduct and strengthened our controls. We have introduced
systems and enhanced procedures to monitor how we execute client
transactions, carried out extensive conduct-focused training and
built a conduct-led culture. As a result, the FX DPA has now
expired, although the process to formally dismiss the underlying
criminal charges will continue for several months. Our
corresponding 2017 Consent Order with the US Federal Reserve Board
remains in force and going forward we seek to continue to implement
further reforms and we aim to ensure that they are effective and
sustainable in the long term.
Managing front-line employees and their incentives
In our WPB business, we provide training to our employees
through our Product Management Academy, with more than 2,000 of our
colleagues completing over 5,200 courses since 2017, including on
customer insight, customer-focused design, communications, product
development and governance.
We also use a discretionary approach to incentivising our
front-line colleagues instead of a straight formula linked to
sales. This global improvement has resulted in a more balanced
performance assessment for our people. We have since reviewed the
incentives approach during 2020 to establish opportunities to be
even more customer-centric, have greater focus on employee
development and simplify the framework. We have also strengthened
our approach to third-party sales agents that distribute our
products, such as insurance, to ensure that our principles on
balanced reward are in place. While there is still more to do, this
change is designed to improve oversight and alignment with
third-party sales agents.
HSBC Holdings plc Annual Report and Accounts 2020 61
Employees
We are opening up a world of opportunity for our colleagues by
building an inclusive organisation that prioritises well-being,
invests in learning and careers and prepares our colleagues for the
future of work.
At a glance
Our culture
Our organisation has been shaped by the many cultures,
communities and continents we serve, with over 226,000 full-time
equivalent employees ('FTEs') in 64 countries with 168
nationalities. We were founded on the strength of different
experience and we continue to value that difference. We strive to
champion inclusivity to better reflect the worlds of our customers
and communities. Our culture is underpinned by our values: we value
difference; we succeed together; we take responsibility, and we get
it done.
For further details on region, age, ethnicity, tenure and
employment type of our workforce, see the ESG Data Pack at
www.hsbc.com/esg.
The future of work
The Covid-19 outbreak taught us many roles can be undertaken
effectively outside of our branches and offices, accelerating our
focus on enabling greater flexibility in future working
arrangements. Reskilling is also a key priority for us and we are
investing in a programme to build future skills as we transform the
structure of our business.
-- Read more on the future of work on page 63.
Inclusion
While there have been many new challenges during the Covid-19
outbreak, we continued our emphasis on inclusion. We believe that
diversity makes us stronger, and we are dedicated to building a
diverse and connected workforce. We made good progress on gender
diversity and increased our focus on ethnicity and supporting our
Black colleagues.
-- Read more on inclusion on page 64.
Well-being
We provided extra resources to help colleagues manage the mental
and physical health challenges caused by the Covid-19 outbreak. We
carried out two global well-being surveys of our colleagues in
2020, helping to shape our response and ensure we had the right
assistance in place.
-- Read more on well-being on page 66.
Learning and skills development
We have continued to find new ways to support colleagues'
learning and growth, transitioning to on-demand and digital
platforms. We are also using video technologies to collaborate
across boundaries more than ever before.
-- Read more on learning and skills development on page 67.
Listening to our colleagues
We believe in the importance of listening to our colleagues and
seeking innovative ways to encourage colleagues to speak up. We
monitor how we perform on selected metrics and benchmark against
our peers.
-- Read more on listening to our colleagues on page 68.
62 HSBC Holdings plc Annual Report and Accounts 2020
The future of work
We expect the way our colleagues work to change as the workforce
of the future meets new demands. Colleagues will be using new
skills we have helped them to develop, and working more flexibly to
support a better work-life balance.
Adapting how we work
The Covid-19 outbreak tested our colleagues in many ways and
they adapted at pace in this fast-changing environment.
In branches, we introduced social distancing measures, provided
personal protective equipment, reduced operating hours and offered
virtual appointments. For office workers, we made sure
cybersecurity controls and software supported home working. In
2020, we delivered laptops, desktops or virtual desktop
infrastructure to over 78,000 colleagues and had at points up to
70% of our whole workforce working from home at the same time. For
some of our colleagues, we changed their roles, asking them to
undertake activities that were outside of their normal activities
(see box). We took an early decision not to furlough colleagues in
the UK or apply for government support packages for our employees
throughout 2020.
Our businesses are thinking about how we adapt to the future of
work. As our offices reopen we expect to see a much greater degree
of hybrid working, recognising that some roles and groups, such as
regulated roles and new graduates, will need to spend more time in
the office than others. We expect a change in the way we use our
office space, recognising the work-life balance and environmental
benefits of hybrid working arrangements.
The Covid-19 outbreak also impacted turnover, with 2020
recording the lowest voluntary turnover in the last 10 years at 8%,
down three percentage points on 2019. The rates gradually declined
month on month from April as the pandemic became more of a global
challenge. Historically, voluntary turnover has on average been
closer to 11%, and has remained largely flat at this rate over
recent years.
Building the skills of the future
We have developed a flagship Future Skills programme to prepare
our colleagues for the changing skills required in the future
workplace. We want our employees to take greater ownership of their
development and invest time in learning new skills. We are creating
an innovative internal talent marketplace through new technology
that helps improve career development by matching the skills and
aspirations of our colleagues with business needs and
opportunities.
Managing change
Our three-year transformation programme, launched in February
2020, is accelerating the delivery of our strategy by creating a
simpler, more customer-centric and future-focused bank.
We work hard to ensure our colleagues understand the reasons for
change and how they might be affected. We communicate through our
managers, supported by our transformation programme website, which
explains our plans and rationale in each of our global businesses
and functions, and we are committed to engaging meaningfully with
our employee representative bodies. We ask our businesses to apply
global guidance when carrying out changes to how we work to ensure
a fair and consistent experience for our colleagues. We also
provide mental health support guidance to managers to ensure they
are mindful of the psychological impact of change for our
colleagues and know how to access help. During the height of the
Covid-19 outbreak, we paused the vast majority of redundancy
activity.
We redeploy our colleagues impacted by change where possible.
During 2020, we restricted external hiring and retained employees
in preference to contractors so that internal talent came first
wherever possible. We have made it easier for our colleagues
affected by the transformation programme to find alternative roles
with us by creating a dedicated platform on which their CVs are
directly visible to internal recruiters. Of those whose roles
became redundant in 2020, 14% were able to find new positions
within HSBC. We provide skills development, career transition
support and education for all our colleagues, including those who
leave as a result of the transformation programme. We will aim to
continue to retain and reskill our colleagues as much as possible
over the next two years of the programme but where we cannot we
provide severance payments in many locations that exceed statutory
minimum levels.
Adapting to a changing environment
Many of our colleagues have needed to adapt to the challenges
brought about by the Covid-19 outbreak, and in some cases took on
new responsibilities. In the UK, we asked colleagues to volunteer
to undertake activities that were outside of their normal roles to
meet the changing needs of our customers. This helped to keep many
of our colleagues working during these extraordinary times. When we
reduced branch opening times, over 1,000 UK branch staff worked in
other business areas supporting activities such as processing
Bounce Back loans to businesses, helping customers access loan
repayment holidays and supporting with card disputes.
70%
Workforce working from home at the same time during the Covid-19
outbreak.
8%
Voluntary employee turnover.
(2019: 11%)
HSBC Holdings plc Annual Report and Accounts 2020 63
Inclusion
Our customers, suppliers and communities span many cultures and
continents. We believe this diversity makes us stronger, and we are
dedicated to building a diverse and connected workforce where
everyone feels a sense of belonging.
Women in senior leadership
In 2018, we committed to reach 30% women in senior leadership
roles by 2020, which are classified as 0 to 3 in our global career
band structure. We achieved 30.3%. Appointments of external female
candidates into senior leadership reduced from 33.0% in 2019 to
31.6% in 2020. We will continue efforts to build more
gender-balanced leadership teams and have set ourselves a target to
achieve 35% women in senior leadership roles by 2025.
To diversify the talent pipeline, every member of our Group
Executive Committee, as well as many members of their management
teams, actively sponsor colleagues from under-represented groups,
including women. We paid specific attention to how we select and
promote candidates for roles and how colleagues can readily access
opportunities.
In 2020, we expanded the Accelerating into Leadership programme
to all businesses and functions. The programme provides group
coaching, networking and development for high-performing women at
manager level, which are those at level 4 in our global career band
structure. Our Accelerating Female Leaders programme, which focuses
on developing high-performing women at level 3 in the global career
band structure, was attended by four times as many women in 2020
than in the previous year.
Focus on UK gender and ethnicity pay gaps
In 2020, our median aggregate UK-wide gender pay gap, including
all reported HSBC entities, was 48%, and our median bonus gap was
57.9%. Our overall UK gender pay gap is driven by the shape of our
UK workforce. There are more men than women in senior and high-paid
roles, and more women than men in junior roles, many of which are
part-time.
For the first time we also published our UK ethnicity pay gap.
Our median aggregate UK-wide ethnicity pay gap across all reported
HSBC entities was -5.6%. Our median bonus gap was 0.8%. However,
the pay gaps differ depending on the underlying ethnic minority
group. The businesses and roles which employees from different
ethnic groups work in impact the gaps, with relatively lower
representation of ethnic minority employees in senior, higher paid
roles. While 79% of our UK employees have declared their ethnicity,
fewer senior, higher paid employees have done so to date and were
therefore not included in our ethnicity pay gap analysis.
We intend to publish ethnicity representation and pay gap data
annually to help ensure we continue making progress and help us
identify further areas for action.
We review our pay practices regularly and also work with
independent third parties to review equal pay. The most recent
exercise was undertaken in 2020. If pay differences are identified
that are not due to objective, tangible reasons such as performance
or skills and experience, we make adjustments.
Our complete Gender and Ethnicity UK Pay Gap Report 2020, along
with more information about our pay gaps and related actions, can
be found at
www.hsbc.com/who-we-are/our-people-and-communities/diversity-and-inclusion.
Percentage of our senior leadership who are women
30.3%
(2019: 29.4%)
Gender balance
1 Combined executive committee and direct reports includes HSBC
executive Directors, Group Managing Directors, Group Company
Secretary and Chief Governance Officer and their direct reports
(excluding administrative staff).
2 Senior leadership refers to employees performing roles
classified as 0, 1, 2 and 3 in our global career band
structure.
Our approach to ethnicity and Black Lives Matter
In May 2020, we launched a global ethnicity inclusion programme
to help us respond to challenges that we identified through our
data. This programme aims to improve the diversity of our workforce
ethnicity profile across the organisation to reflect the customers
and communities we serve.
The tragic death of George Floyd in the US accelerated
conversations around race and ethnicity across the Group. Listening
to what our colleagues have told us in response to the Black Lives
Matter movement has been so important in informing our actions. In
July 2020, we also set out our race commitments to improve
opportunities for Black and ethnic minority colleagues and boost
the diversity of our senior leadership.
As part of this, we set an aspirational target to at least
double the number of Black employees in senior leadership roles
from 0.7% at 31 December 2020 to 1.3% globally by 2025. To achieve
our commitments, we are also strengthening our recruitment
processes, partnering with specialist search firms, and enhancing
talent development opportunities. In October 2020, we also
published country-specific ethnicity data and action plans in the
UK and US.
64 HSBC Holdings plc Annual Report and Accounts 2020
Delivering more inclusive outcomes for all
Our diversity and inclusion strategy is designed to deliver more
inclusive outcomes for our colleagues, customers and suppliers.
Globally we have driven improvements in representation and
sentiment across multiple diversity strands, grown our commercial
focus, strengthened our employee networks, and improved our
diversity data. Here are some examples of our key achievements in
2020:
Beyond gender
Our global approach to diversity goes beyond gender to include
ethnicity, disability and LGBT+ inclusion:
-- Ethnicity: In 2020, we launched our global ethnicity
inclusion programme, which is sponsored by Group Chief Risk Officer
Pam Kaur and aims to diversify our workforce ethnicity profile (see
box on page 64).
-- Disability: We continue to develop our global approach to
workplace adjustments to improve consistency for employees with
disabilities, as part of our global disability confidence
programme, sponsored by Group Chief Financial Officer Ewen
Stevenson. We used our global footprint and connectivity to raise
awareness about disability inclusion through our sponsorship of
#PurpleLightUp.
-- LGBT+: Our work, particularly around leadership and engaging
colleagues, has again been recognised by Stonewall, which named
HSBC as one of only 17 Top Global Employers for LGBT+
inclusion.
Beyond employees
Across our businesses, we are taking opportunities to be more
inclusive of diverse customer groups.
In our private bank, we want to improve how we serve and gain
insights into our female clients, and we are partnering with
external networks AllBright and WealthiHer to address ways to
improve women's wealth.
Our Global Banking and Markets business has a team that
incorporates a gender perspective into our mainstream products and
business lines to generate business revenue from transactions that
drive gender equality.
Our insurance business HSBC Life uses a diversity and inclusion
framework to ensure product development and engagement
opportunities are designed to address needs across different
customer groups.
Employee networks
By appointing global executive sponsors from our Group People
Committee as well as global co-chairs across our employee networks
we are helping them to deliver consistent and impactful outcomes
aligned to our strategy.
In 2020, we appointed our first global executive sponsors for
our Embrace (ethnicity) and Generations (age) networks, and our
first global co-chairs for Embrace, Ability (disability) and
Nurture (caregivers) networks. Global sponsors and co-chairs are
identifying issues and opportunities across their groups in
different markets, and are collaborating with key business areas
and across networks to implement changes that will help improve
representation and engagement with diverse groups of
colleagues.
Enhancing data
Collecting better diversity data is imperative to measure the
success of our diversity and inclusion strategy, and to inform our
inclusion priorities going forward. It will help us to gain a more
accurate picture of our workforce diversity, pinpoint inclusion
hotspots and be more transparent about our progress.
We have updated ethnicity categories in markets where we can
currently collect that data to better reflect how colleagues
self-identify. In many locations we have also delivered local
campaigns to promote self-identification. In 2021, we are enabling
more colleagues to share their ethnicity data with us where it is
legally permissible and culturally acceptable to do so. We will run
similar self-identification campaigns to improve declaration rates
throughout the year.
Making progress and next steps
There is a clear commitment to achieve change from across our
leadership. This commitment is reinforced by enhanced recruitment
processes, targets, partnerships with like-minded organisations,
programmes to accelerate diverse leadership and ongoing dialogue
with employees from under-represented groups to understand what we
can do better.
The next phase of our strategy will take a broader approach to
inclusion across the organisation. We will expand our focus to
recognise the impact of belonging to multiple under-represented
groups - for example, the barriers that might be faced by a Black
women with disability.
We will continue to integrate inclusion principles into how we
do business, and will use our employee networks to help us address
barriers or opportunities together. Following colleague feedback,
we will also seek to improve the HSBC experience for those with
disability, using the Business Disability Forum's Disability
Standard - for which we achieved Silver in 2020 - as well as for
our ethnic minority colleagues.
We are realistic that some progress will take time, and we will
keep seeking to understand different perspectives and experiences
to grow, learn and improve.
For further details on how our colleagues self-identify, see the
ESG Data Pack at www.hsbc.com/esg.
HSBC Holdings plc Annual Report and Accounts 2020 65
Well-being
We are deeply committed to supporting the well-being of our
people. Given the immense strain caused by the Covid-19 outbreak,
including the new realities of working from home, home schooling
and lack of physical contact with family members, friends and
colleagues - it has never been more important.
Our well-being priorities, driven by feedback from surveys of
our people, remain mental health, work-life balance and financial
security. Helping our colleagues be healthy and happy is the right
thing to do, but by doing so, we also enable them to better support
our customers and communities, which has been hugely important this
year.
Adapting to the challenges
In 2020, we provided extra resources to help colleagues manage
the mental and physical health challenges caused by the Covid-19
outbreak. We launched a microsite to provide them with up-to-date
information to support well-being, including guidance on how to
work safely from home. We also made medical services available via
video-conferencing to more than 50,000 colleagues.
At the start of the outbreak, we undertook additional surveys
and virtual focus groups, helping us shape our response to the
Covid-19 outbreak and to ensure we had the right assistance in
place. From this, 86% told us they were confident in the approach
our leadership team was taking to managing the crisis. In December
2020, we ran our annual global well-being survey, where 92,000
colleagues took part, helping us evaluate progress since 2019 and
to shape future plans.
Mental health
Our global well-being survey revealed 81% of colleagues rated
their mental health as positive, a decrease of two points compared
with 2019. Given the extraordinary challenges caused by the
Covid-19 outbreak, we are not surprised to see that decrease.
However, we are very encouraged to see that 70% of colleagues feel
confident talking to their line manager about mental health, an
increase of 12 points compared with 2019.
Just over three-quarters (78%) of colleagues know how to get
support at work about their mental health, an increase of 17 points
compared with 2019, and 63% of colleagues feel able to take time
off work when they experience a mental health concern, an increase
of 17 points compared with 2019. In 2020, we provided specialist
support to colleagues who were particularly affected by the
Covid-19 outbreak, including a mental health seminar to colleagues
in Wuhan, China. Human resources advisers and business continuity
teams were given mental health resource packs. Our employee network
group, Ability, offered weekly mental health calls to those in
need.
We conducted an independent review of all our employee
assistance programmes to see if they met best-practice standards,
and to identify ways to improve our counselling services. We
continued to promote our global mental health education programme
that we launched in 2019, which has been completed by more than
22,000 colleagues. We also redesigned our mental health classroom
course to be delivered virtually. Throughout 2020, we partnered
with mental health groups, the City Mental Health Alliance and
United for Global Mental Health, to share ideas with other
organisations on ways to raise awareness and alleviate stigma
surrounding mental health.
Flexible working
Our colleagues have had to adapt how they work due to the
Covid-19 outbreak, with 80% needing to work from home at the height
of the outbreak. Our global well-being survey revealed 74% of
colleagues feel they have a positive work-life balance, an increase
of two points compared with 2019.
We are encouraged to see 76% of colleagues feel confident
talking to their line manager about work-life balance and flexible
working, an increase of 12 points compared with 2019, and 71% of
colleagues know how to get support at work about work-life balance
and flexible working, an increase of 14 points since 2019. In 2020,
we promoted new resources, videos and education to help colleagues
working remotely. Topics included stress management, coping with
isolation, remote collaboration, workstation support, and balancing
care-giving responsibilities. We are also thinking about how we
will adapt when our offices reopen, recognising a greater need for
hybrid working arrangements and the work-life benefits these
bring.
Financial security
Our global well-being survey revealed 68% of colleagues rated
their financial well-being as positive, an increase of 14 points
compared with 2019. We are encouraged to see that 50% of colleagues
feel confident talking to their line manager about their financial
well-being, an increase of 14 points compared with 2019. The survey
also showed that 56% of colleagues know how to seek support at work
about their financial well-being, an increase of 16 points since
2019, and 42% of colleagues feel they could handle an unexpected
expense without significant hardship, an increase of 10 points
since 2019. While these results are positive, we know there is more
we can do.
Conscious that the pandemic may put financial pressures on some
of our colleagues, we worked with experts from our Wealth and
Personal Banking business to create a financial well-being
education programme to help colleagues develop healthy financial
habits. The programme was launched globally as part of our Future
Skills Resilience curriculum. We will continue to expand this
programme, with a follow-up module on the theme of building up
savings, later in 2021.
World Mental Health Day
To celebrate World Mental Health Day, we ran a global awareness
campaign and created a film of colleagues sharing personal stories.
Our human resources teams and employee network groups held virtual
events in all locations across the whole month of October 2020.
These events featured colleagues and external experts providing
advice on a range of mental health-related topics including
resilience, sleep and management of stress. Following this
activity, we saw a 29% increase in colleagues accessing well-being
resources compared with the previous month. We believe this
campaign activity contributed to the significant increases in
levels of awareness, confidence and de-stigmatisation of mental
health, and why 75% of colleagues said they believe HSBC cares
about their well-being in our global well-being survey. In 2021, we
will continue to work with our charity partner, United for Global
Mental Health, to create campaigns that raise awareness and
alleviate stigma.
66 HSBC Holdings plc Annual Report and Accounts 2020
Learning and skills development
A workforce capable of meeting the challenges of today and
tomorrow requires significant support to develop the right skills.
Whatever our colleagues' career paths, we have a range of tools and
resources to help them.
A rapid shift to virtual learning
The Covid-19 outbreak resulted in a halt to classroom training
and rapid expansion in virtual learning. We prioritised the
transition to remote working and helping colleagues manage their
well-being. The shift from physical classroom training to shorter
virtual equivalents and online resources resulted in a total of 5.2
million hours and 2.9 days per FTE training in 2020.
We converted or rebuilt technical, professional and personal
classroom programmes to deliver online. New joiners to HSBC
experienced an immersive virtual induction programme and virtual
internships. Our global graduate induction programme moved entirely
online with more than 100 leaders and graduate alumni welcoming
approximately 650 graduates.
Supporting self-development
We have a range of tools and resources to help colleagues take
ownership of their development and career.
-- HSBC University is our one-stop shop for learning delivered
via an online portal, network of global training centres and
third-party providers.
-- Our My HSBC Career portal offers career development resources
and information on managing change and on giving back to the
organisation and the communities in which we operate. Over 100,000
of our colleagues made use of it in 2020.
-- We launched a global mentoring system in 2020 to enable
colleagues to match with a mentor or mentee. At 31 December 2020,
we had in excess of 6,800 mentors and mentees in 58 countries and
territories.
Developing core skills
Our managers are the critical link in supporting our colleagues.
In 2020, we redesigned our suite of training and resources for
managers so they can focus on the most important skills including
leading and supporting teams through change.
Risk management remains central to development and is part of
our mandatory training. Those at higher risk of exposure to
financial wrongdoing experience more in-depth training on financial
risks, such as money laundering, sanctions, bribery and corruption.
Other programmes and resources address specific areas of risk, like
management of third-party suppliers.
Our Cyber Hub brings together training, insights, events and
campaigns on how to combat cyber-crime. We are also supporting
those who develop models and senior leaders with training to help
them understand and apply our Principles for the Ethical Use of Big
Data and AI.
A learning and feedback culture
We want our colleagues to be well prepared for changing
workplace requirements and so have developed a flagship Future
Skills programme to support them. We identified nine key behaviours
we believe are necessary future skills for colleagues and built a
curriculum of resources to support learners to develop these.
More than 1,000 colleagues now act as Future Skills Influencers,
supporting their businesses and teams to invest in learning. In
November 2020, we ran a week-long MySkills festival, which helped
colleagues explore future skills through virtual events,
interactive workshops and online resources. Demand to join sessions
surpassed our expectations with more than 45,000 registrations for
the events.
Senior succession planning
Developing future leaders is critical to our long-term success.
The Group Executive Committee dedicates time to articulate the
current and future capabilities required to deliver the business
strategy, and identify successors for our most critical roles.
Successors undergo robust assessment and participate in
executive development. Potential successors for senior roles also
benefit from coaching and mentoring and are moved into roles that
build their skills and capabilities.
Training at HSBC
5.2 million
Training hours carried out by our colleagues in 2020.
(2019: 6.5 million)
2.9 days
Training days per FTE.
(2019: 3.5 days)
Inspiring future coders
We know supporting the next generation provides a sense of
fulfilment to our colleagues. We support the Technovation Girls
programme, which inspires girls globally to design and code
applications that solve problems in their community. The long-term
goals of the programme are to build the capacity of girls as
technology innovators, thereby reducing the gender gap in science,
technology, engineering and mathematics ('STEM') professions.
Through our support, over 1,400 girls across the globe were able
to participate in the programme in 2020. In August 2020, we
supported the virtual Technovation World Summit that had nearly
2,000 participants. Winning teams were awarded cash prizes to spend
on furthering their education in STEM subjects or turning their
ideas into commercial projects.
HSBC Holdings plc Annual Report and Accounts 2020 67
Listening to our colleagues
We run a Snapshot survey every six months and report insights to
our Group Executive Committee and the Board. Results are shared
across the Group to provide managers in each region with a better
understanding to plan and make decisions.
As our colleagues faced considerable challenges in 2020,
Snapshot was a critical tool to ensure we were responding to our
colleagues' needs.
Listening to employee sentiment
In our 2020 Snapshot surveys, we had a record response rate of
62% in July and 56% in December, up from 52% and 50% respectively
in the same periods of 2019. We undertook additional surveys and
virtual focus groups, focusing on our colleagues' well-being, the
changes that the Covid-19 outbreak brought to their working lives
and their views on returning to the workplace. More than 50% of our
colleagues participated in our Covid-19 well-being survey, with 86%
telling us they were confident in the approach our leadership team
was taking to managing the crisis.
Finding new ways to listen
We used new and innovative ways to gather feedback and ideas
from our colleagues in 2020. In June, we conducted virtual focus
groups for the first time. Approximately 850 employees in four
markets discussed what it was like to work during the Covid-19
outbreak and considered how work will evolve in the future. In
October, we organised our first 'employee jam' - a live online chat
between employees in 49 countries. This online conversation ran
over 72 hours and captured more than 9,500 online posts on topics
including the future of work and our values, which we have
refreshed to remain relevant and reflective of our
organisation.
In February 2021, we introduced to our colleagues our revised
purpose and values, which were co-created through an extensive
listening, talking and reflecting exercise with tens of thousands
of colleagues, customers and other stakeholders. Our new purpose is
'Opening up a world of opportunity'. Our new values are 'we value
difference'; 'we succeed together'; 'we take responsibility'; and
'we get it done'.
It was the largest employee engagement programme in HSBC's
history - helping to ensure our plans were an accurate reflection
of everything our colleagues told us about what is best about HSBC,
and everything we want to become.
During the consultation on our values, 90% of colleagues said
they were clear on HSBC's new values and how they could be embedded
into their day-to-day work.
Encouraging our colleagues to speak up
We believe that change only happens when people speak up. If our
colleagues have concerns, we want them to speak up to help us do
what's right. In 2020, acting on findings from the November 2019
Snapshot survey, we ran a programme to raise awareness of how to
speak up and what happens when we do. Our efforts focused on
improving the process, demystifying how we investigate concerns and
improving transparency about what action we should take as a
result. Following the 2020 'Speak Up' campaign, our speak-up index,
which is formed by surveying our colleagues' comfort on speaking
up, rose six points in December 2020, compared with November 2019.
The index outperformed peers by 10 points. We were pleased to see
an improvement in employee sentiment, with 78% of respondents
saying they felt able to speak up when they saw behaviour they
considered to be wrong. However, a smaller proportion (66%) said
they were confident that if they speak up, appropriate action will
be taken. We recognise there is more to do to give our colleagues
confidence that their concerns will be fully addressed. In 2021, we
aim to continue the speak-up programme and will monitor sentiment
through our Snapshot survey.
Our whistleblowing channels
At times individuals may not feel comfortable speaking up
through the usual channels. Our global whistleblowing channel, HSBC
Confidential, allows our colleagues and other stakeholders to raise
concerns confidentially, and if preferred, anonymously (subject to
local laws). Enhancements to the channel in December 2020 mean the
majority of concerns are now raised through an independent third
party offering 24/7 hotlines and a web portal in multiple
languages.
We also provide and monitor an external email address for
concerns about accounting, internal financial controls or auditing
matters (accountingdisclosures@hsbc.com).
In 2020, while we continued to actively promote the channel, the
volume of whistleblowing concerns fell by 11%, driven in part by
the change in working environment during the Covid-19 outbreak. Of
the whistleblowing cases closed in 2020, 81% related to behaviour
and conduct, 15% to security and fraud risks, 4% to compliance
risks and less than 1% to other categories.
The Group Audit Committee has overall oversight of the Group's
whistleblowing arrangements. Concerns are investigated
proportionately and independently, with action taken where
appropriate. This can include disciplinary action, dismissal, and
adjustments to variable pay and performance ratings.
Our 2020 Snapshot survey showed increasing confidence among our
colleagues in raising whistleblowing concerns without fear of
reprisal, reflecting our policy of zero tolerance for acts of
retaliation. This continues to be an area of focus.
Employee conduct and harassment
We rely on our people to deliver fair outcomes for our customers and
to make sure we act with integrity in financial markets.
We foster a healthy working environment and expect our people to treat
each other with dignity and respect, and take action where we find
behaviour that falls short of our expectations.
The types of cases, thematic links between them, and changes in volumes
are reported on a regular basis to management committees. Where we
see themes or adverse trends we take action, including training, communications
and policy changes.
In 2020, to ensure clarity over the standards of behaviour expected,
we delivered mandatory training on bullying and workplace harassment.
The training emphasised our commitment to creating an environment where
our people feel comfortable to speak up and step in where they witness
poor behaviour.
We also took disciplinary action against 2% of our employees for poor
conduct, examples of which include avoiding customer calls and not
treating colleagues respectfully. Over 800 colleagues were dismissed
for poor behaviour, including 41 for workplace harassment. We believe
in transparency on these matters, and also know that we have room to
improve. In 2021, we will enhance our conduct policies and procedures
so that they remain current, clear and effective.
68 HSBC Holdings plc Annual Report and Accounts 2020
Measuring our progress against peers
In 2020, we introduced six new Snapshot indices to measure key
areas of focus and to enable comparison against a peer group of
global financial institutions. The table sets out how we
performed.
HSBC vs
Index Score(1) vs 2019 benchmark(2) Questions that make up the index
Employee 72 +5 +2 I am proud to say I work for this company.
engagement I feel valued at this company.
I would recommend this company as a great
place to work.
Employee 72 New +4 I generally look forward to going to work.
focus My work gives me a feeling of personal
accomplishment.
My work is challenging and interesting.
Strategy 68 New -1 I have a clear understanding of this company's
strategic objectives.
I am seeing the positive impact of our
strategy.
I feel confident about this company's
future.
Change leadership 74 New 0 Leaders in my area set a positive example.
My line manager does a good job of communicating
reasons behind important changes that
are made.
Senior leaders in my area communicate
openly and honestly about changes to the
business.
Speak-up 75 +6 +10 My company is genuine in its commitment
to encourage colleagues to speak up.
I feel able to speak up when I see behaviour
which I consider to be wrong.
Where I work, people can state their
opinion without the fear of negative consequences.
Trust 75 +6 +5 I trust my direct manager.
I trust senior leadership in my area.
Where I work, people are treated fairly.
1 Each index comprises three constituent questions, with the
average of these questions forming the index score.
2 We benchmark Snapshot results against a peer group of global
financial services institutions, provided by our research partner,
Karian and Box. Scores for each question are calculated as the
percentage of employees who agree to each statement. For further
details on the constituent questions and past results, see the ESG
Data Pack at www.hsbc.com/esg.
Measuring employee engagement
To understand how our colleagues perceive the organisation, we
ask if they feel proud, valued and willing to recommend HSBC as a
great place to work. These questions form our employee engagement
index. Engagement rose significantly in 2020 and was two points
above our peers. More colleagues said they 'feel valued by HSBC'
compared with November 2019. Employee advocacy, which is defined as
those who would recommend HSBC, improved five points in 2020 to
71%. We aim to continue improving our understanding and address why
20% of our colleagues report neutral levels of advocacy. Our
research showed that key drivers of engagement are career
opportunities, trust in leadership and our commitment to encourage
speaking up. We expect our flagship programme to help build future
skills and that this will in turn drive further improvements in
engagement levels.
Measuring employee focus
Our employee focus index tells us about our colleagues'
perception of their work. The 2020 results were four points above
our peers. This will be a key measure of progress for our
transformation and our programme to build future skills.
Measuring strategy and change leadership
Our strategy index, which measures how employees feel about
HSBC's direction, was just below its benchmark. However, the index
included an improvement in scores for questions on whether
colleagues see a positive impact of our strategy and if they have
confidence in the future. Our efforts to reshape the business and
the uncertain business environment are affecting these results, and
we recognise the challenge this creates for colleagues. Despite
these challenges, our change leadership index, which measures how
employees feel about change communication and leadership setting a
positive example, performed in line with the benchmark. This will
continue to be vital during our ongoing transformation.
Measuring speak-up and trust
Our speak-up index rose six points from November 2019,
representing the biggest improvement in the indices we measure.
Similarly, trust, particularly in senior leadership, improved
significantly. These results are encouraging but need to be viewed
in the context of the Covid-19 outbreak where research showed our
colleagues were positive about HSBC's handling of the crisis.
Maintaining these gains through a period of ongoing change and
uncertainty will require sustained effort.
Whistleblowing concerns raised (subject to investigation) in
2020
2,510
(2019: 2,808)
Substantiated and partially substantiated whistleblowing cases
in 2020(1)
42%
(2019: 33%)
1 The 2020 substantiation rate excludes concerns redirected to
other escalation routes.
Employee advocacy
71%
Would recommend HSBC as a great place to work.
(2019: 66%)
HSBC Holdings plc Annual Report and Accounts 2020 69
Governance
We remain committed to high standards of governance. We work
alongside our regulators and recognise our contribution to building
healthy and sustainable societies.
At a glance
Our relationship
We act on our responsibility to run our business in a way that
upholds high standards of corporate governance.
We are committed to working with our regulators to manage the
safety of the financial system, adhering to the spirit and the
letter of the rules and regulations governing our industry. In our
endeavour to restore trust in our industry, we aim to act with
courageous integrity and learn from past events to help prevent
their recurrence.
We meet our responsibilities to society, including through being
transparent in our approach to paying taxes. We also seek to ensure
we respect global standards on human rights in our workplace and
our supply chains, and continually work to improve our compliance
management capabilities.
We acknowledge that increasing financial inclusion is a
continuing effort, and we are carrying out a number of initiatives
to increase access to financial services.
-- For further details of our corporate governance, see our
corporate governance report on page 195.
Respecting human rights
We respect human rights and have signed, or expressed support
for, a number of international codes, as set out in our Statement
on Human Rights.
-- Read more on respecting human rights on page 71.
Supporting financial inclusion
We aim to deliver products and services that address financial
barriers. We invest in financial education to help customers,
colleagues and people in our communities be confident users of
financial services.
-- Read more on supporting financial inclusion on page 71.
Protecting data
We are committed to protecting the information we hold and
process in accordance with local laws and regulations. We continue
to strengthen our controls to prevent, detect and react to cyber
threats.
-- Read more on protecting data on page 72.
Safeguarding the financial system
We remain committed in our efforts to combat financial crime by
continuing to invest in new technology to protect our customers and
organisation, while supporting key industry initiatives.
-- Read more on safeguarding the financial system on page 73.
Our approach with our suppliers
Our ethical code of conduct for suppliers of goods and services,
which must be complied with by all suppliers, sets out minimum
standards for economic, environmental and social impacts.
-- Read more on our approach with our suppliers on page 73.
A responsible approach to tax
We seek to pay our fair share of tax in the jurisdictions in
which we operate and to minimise the likelihood of customers using
our products to inappropriately avoid tax.
-- Read more on a responsible approach to tax on page 74.
Restoring trust
We have sought to learn from past mistakes and we are seeking to
develop and implement specific measures designed to prevent
recurrence of similar events in the future.
-- Read more on restoring trust on page 75 .
70 HSBC Holdings plc Annual Report and Accounts 2020
Respecting human rights
We recognise the duty of states to protect human rights and the
role played by business in respecting them, in line with the UN
Guiding Principles' Protect, Respect and Remedy framework. We have
signed, or expressed support for, a number of international codes
as set out in our Statement on Human Rights. Our Human Rights
Steering Committee, which was set up in 2018, continues to develop
our approach to human rights. Our Statement on Human Rights is
available at www.hsbc.com/our-approach/esg-information.
Pioneering scheme
Our pioneering scheme to help survivors of human trafficking is
now used as a model for making financial services more accessible
to vulnerable communities through the UN's Finance Against Slavery
and Trafficking ('FAST') Survivor Inclusion Initiative.
Building on the success of our Survivor Bank programme in the
UK, for which we received a Stop Slavery Award from the Thomson
Reuters Foundation, we became the first bank in Hong Kong to offer
a Hong Kong Dollar Statement Savings account for residents who do
not have a fixed abode, or who are living in subdivided flats
without access to postal services. Having a bank account can
improve financial security for members of disadvantaged communities
- including those under potential risk of forced labour or debt
bondage - and potentially enable them to receive welfare allowances
or find employment.
Spotting the signs of human trafficking
In many cases, transactions related to modern slavery and human
trafficking will not be identified by automated systems alone. As a
result, our analysts also use a range of secondary indicators that
may not signify suspicious activity on their own, but which can be
assessed as part of a case review. Examples where such transactions
have successfully been identified and escalated are then shared
internally, as case studies for others to learn from.
For details of our approach to modern slavery, see:
www.hsbc.com/our-approach/risk-and-responsibility/modern-slavery-act.
Identifying suspicious activity
When two large cash deposits were made to the same account on
two consecutive days, it raised suspicion with one of our analysts.
Further investigation identified a number of cautionary flags for
potential illegal activity, including the apparent findings that 17
people - all of whom banked with HSBC - lived in the same property.
The case was escalated to an investigations team, who filed a
suspicious activity report with the UK regulator. We also proceeded
to close the account. With these actions, we not only disrupted the
individual, but also alerted the authorities to take the case
forward through appropriate law enforcement channels.
Supporting financial inclusion
We believe that financial services, when accessible and fair,
can reduce inequality and help more people access
opportunities.
Access to products and services
We aim to deliver products and services that address the
barriers people can face in accessing financial services.
In 2020, we continued to offer innovative product offerings. In
the UK, we are educating people about banking services and reducing
barriers for those who do not have a fixed address as well as for
survivors of human trafficking. We also introduced new products,
such as banking services for refugees in Hong Kong, allowing
individuals to have a safe, affordable way to receive support from
overseas family, friends or local non-governmental
organisations.
We embedded diversity and inclusion standards into our new
product approval framework for retail banking, wealth, insurance
and digital products, such as in India, where we added a
transgender option to the customer application and underwriting
criteria for health insurance.
Access to financial education
We invest in financial education to help customers, colleagues
and people in our communities be confident users of financial
services.
In 2020, we provided more of our own financial education
content, such as articles and features on our digital channels. We
had over 1.7 million unique visitors to our digital content in
2020, making progress towards our 2019 goal of reaching four
million unique visitors by the end of 2022.
We also support charity programmes that deliver financial
education. In 2020, HSBC UK partnered with Young Money, a UK-based
charity focused on children's financial education, to introduce
Money Heroes, an innovative education programme that brings
together teachers and parents or carers to develop a child's
financial capability from ages three to 11. Combining learning with
real life activities, Money Heroes aims to reach one million
children over three years, supporting the most vulnerable
communities.
HSBC Holdings plc Annual Report and Accounts 2020 71
Protecting data
Cybersecurity
The threat of cyber-attacks remains a concern for our
organisation, as it does across the entire financial sector.
Failure to protect our operations from internet crime or
cyber-attacks may result in financial loss, disruption for
customers or a loss of data. This could undermine our reputation
and ability to attract and retain customers.
We have invested in business and technical controls to help
prevent, detect and react to these threats. We continually evaluate
threat levels for the most prevalent attack types and their
potential outcomes. We have strengthened our controls to reduce the
likelihood and impact of advanced malware, data leakage,
infiltration of payment systems and denial of service attacks. In
2020, we continued to strengthen our cyber defences to enhance our
cybersecurity capabilities, including: Cloud security; identity and
access management; metrics and data analytics; and third-party
security reviews. These defences are grounded in mature controls
that mitigate the current cyber-attacks and build upon a proactive
data analytical approach to identify and mitigate future advanced
targeted threats. In addition, an important part of our defence
strategy is ensuring our people remain aware of cybersecurity
issues and know how to report incidents. We continue to run regular
cyber awareness campaigns and have dedicated training programmes in
place.
We operate a three lines of defence model, aligned to the
operational risk management framework, to ensure robust oversight
and challenge of our cybersecurity capabilities and priorities. In
the first line of defence, we have risk owners within global
businesses and functions who are accountable for identifying,
owning and managing the cyber risk. They work with control owners
to help ensure controls are in place to mitigate issues, prevent
risk events from occurring and resolve them if they do. These
controls are executed in line with policies produced by the
information security risk teams, the second line of defence, which
provide independent review and challenge. They are overseen by the
third line of defence, which is the Global Internal Audit
function.
We regularly report and review cyber risk and control
effectiveness at relevant governance forums and the Board to ensure
appropriate oversight. We also report across the global businesses,
functions and regions to help ensure appropriate visibility and
governance of risks and mitigating controls.
Cybersecurity Awareness Month
Our cybersecurity teams endeavour to educate, support and equip
every colleague with the tools to prevent, mitigate and report
cyber incidents, and keep our organisation and customers' data
safe. Throughout October 2020, the cybersecurity team hosted a
number of virtual awareness events for all colleagues as part of a
dedicated annual Cybersecurity Awareness Month. The global and
local events were hosted by our executive leaders, with the support
of a number of internal subject matter experts and external guest
speakers. The Cybersecurity Awareness Month established a new level
of awareness, participation, and commitment to cybersecurity inside
the Group.
Data privacy
We are committed to protecting and respecting the data we hold
and process, in accordance with the laws and regulations of the
geographies in which we operate.
Our approach rests on having the right talent, technology,
systems, controls policies, and processes to help ensure
appropriate management of privacy risk. Our Group-wide privacy
policy and principles provide a consistent global approach to
managing data privacy risk, and must be applied by all of our
global businesses and global functions.
We conduct regular training sessions on data privacy and
security issues throughout the year, including global mandatory
training for all our colleagues, along with additional training
sessions, where required, to keep abreast of new developments in
this space.
We provide transparency to our customers and stakeholders on how
we collect, use and manage their personal data, and their
associated rights. Where relevant, we work closely with third
parties to help ensure adequate protections are provided, in line
with our data privacy policy and as required under data privacy
law. We offer a broad range of channels in the markets we operate,
through which customers and stakeholders can raise any concerns
regarding the privacy of their data.
We have established dedicated privacy teams reporting to the
highest level of management on data privacy risks and issues, and
overseeing our global data privacy programmes. We report data
privacy regularly at multiple governance forums, including at Board
level, to help ensure there is appropriate challenge and visibility
among senior executives. In addition, we have established data
privacy governance structures and continue to embed accountability
across all businesses.
We are committed to implementing industry practices for data
security and our privacy teams work closely to drive the necessary
design, implementation and monitoring of privacy solutions,
including conducting regular reviews and data privacy risk
assessments. We implemented procedures that articulate clearly the
action to be taken when dealing with a data privacy breach. These
include notifying regulators, customers or other data subjects, as
required under applicable privacy laws and regulations, in the
event of a reportable incident occurring.
Data Privacy Day
In January 2020, we hosted a global data privacy event for all
our colleagues to mark International Data Privacy Day. The event
highlighted the importance of taking accountability for data
privacy across the organisation and the continuing need to provide
simple and clearer mechanisms for our customers to have more
control and choice in managing their data.
We invited internal and external speakers, including the UK's
former Deputy Information Commissioner, our Group Data Protection
Officer and Group Chief Data Officer, as well as representatives
from the technology industry. The event was broadcast across 62
countries.
72 HSBC Holdings plc Annual Report and Accounts 2020
Safeguarding the financial system
We have continued our efforts to combat financial crime risks
and reduce their impact on our organisation and the wider world.
These financial crime risks include money laundering, terrorist and
proliferation financing, tax evasion, bribery and corruption,
sanctions and fraud. As part of this work, we have made progress on
several key initiatives, enabling us to manage and mitigate these
risks more effectively, and further our pioneering work in
financial crime risk management across the financial services
industry.
Financial crime risk management
We have embedded a strong financial crime risk management
framework across all global businesses and all countries and
territories in which we operate. For further details on our
financial crime risk management framework, see page 187.
We continue to invest in new technology to enable us to make an
impact in the fight against financial crime. Our global social
network analytics platform, which we launched in 2018 as an
investigative tool, now helps us detect high-risk activity across
our trade finance business. Using a contextual monitoring approach,
we are able to improve the accuracy and efficiency of our
operations, removing delays in approving genuine customer
transactions while focusing attention on behaviour of concern.
Building on this approach, we have made progress in applying
machine learning techniques to improve the accuracy and timeliness
of our financial crime detection capabilities. Working with
industry leaders, we have sought to share what we have learned,
contributing to the development of best practice in this emerging
field, in line with our Principles for the Ethical Use of Big Data
and AI.
We are confident our adoption of these new technologies will
continue to enhance our ability to respond quickly to suspicious
activity and be more granular in our risk assessments, helping to
protect our customers and the integrity of the financial
system.
The scale of our work
Each month, we screen over 708 million transactions across 275
million accounts for signs of money laundering and financial crime.
In addition, we screen approximately 114 million customer records
and 45 million transactions monthly for sanctions exposures. During
2020, we filed almost 50,000 suspicious activity reports to law
enforcement and regulatory authorities where we identified
potential financial crime.
Our approach with our suppliers
We have globally consistent standards and procedures for the
onboarding and use of external suppliers. We require suppliers to
meet our compliance and financial stability requirements, as well
as to comply with our supplier ethical code of conduct. We consider
on time payment to be of paramount importance, and our commitment
to paying our suppliers is in line with all local requirements,
including the Prompt Payment Code in the UK.
Supplier ethical code of conduct
We have an ethical code of conduct for suppliers of goods and
services, which must be complied with by all suppliers. While our
businesses and functions are accountable for the suppliers they
use, our global procurement function owns the code of conduct
review process for them. Our goal is to work collaboratively with
our supply chain partners on sustainability at all times.
The ethical code of conduct, which we require suppliers to
adopt, sets out minimum standards for economic, environmental and
social impacts and outlines the requirement for a governance and
management structure to help ensure compliance. Our supplier
management conduct principles set out how we conduct business with
our third-party suppliers both in our legal and commercial
obligations. They also explain how we treat suppliers fairly
through our behaviour and actions and in line with our values.
Our supplier management principles and our ethical code of
conduct are available at:
www.hsbc.com/our-approach/risk-and-responsibility/working-with-suppliers.
HSBC Holdings plc Annual Report and Accounts 2020 73
A responsible approach to tax
We seek to pay our fair share of tax in the jurisdictions in
which we operate and to minimise the likelihood of customers using
our products and services to evade or inappropriately avoid tax.
Our approach to tax and governance processes is designed to achieve
these goals.
Through adoption of the Group's risk management framework,
controls are in place that are designed to ensure that
inappropriately tax-motivated transactions or products are not
adopted by the Group and that any tax planning used must be
supported by genuine commercial activity. HSBC has no appetite for
using aggressive tax structures. Significant investment has been
made to strengthen our risk processes and train staff to identify
instances of potential tax evasion and we continue to enhance these
processes.
With respect to our own taxes, we are guided by the following
principles:
-- We are committed to applying both the letter and spirit of
the law in all jurisdictions in which we operate. This includes
adherence to a variety of measures arising from the OECD Base
Erosion and Profit Shifting initiative.
-- We seek to have open and transparent relationships with all
tax authorities. As with any group of our size and complexity, a
number of areas of differing interpretation or disputes with tax
authorities exist at any point in time. We work with the local tax
authorities to try to agree and resolve these in a timely
manner.
-- We have applied the OECD/G20 Inclusive Framework Pillar 2
guidance to identify those jurisdictions in which we operate that
have nil or low tax rates (12.5% or below). We have identified
seven such jurisdictions in which we had active subsidiaries during
2020 [1] . We continually monitor the number of subsidiaries within
the Group as part of the Group's ongoing entity rationalisation
programme. We intend to continue this process, with the aim of
ensuring that the HSBC entities remaining in such jurisdictions are
regulated entities essential for conducting business.
With respect to our customers' taxes, we are guided by the
following principles:
-- We have made considerable investment implementing processes
designed to enable us to support external tax transparency
initiatives and reduce the risk of banking services being used to
facilitate customer tax evasion. These initiatives include the US
Foreign Account Tax Compliance Act, the OECD Standard for Automatic
Exchange of Financial Account Information (the 'Common Reporting
Standard'), and the UK legislation on the corporate criminal
offence of failing to prevent the facilitation of tax evasion.
-- We have processes in place to help ensure that
inappropriately tax-motivated products and services are not
provided to our customers.
For further details of our approach to financial crime and
action we have taken, see page 73.
Our tax contributions
The effective tax rate for the year was 30.5%. Further details
are provided on page 308.
As highlighted below, in addition to paying $8.1bn of our own
tax liabilities during 2020, we collected taxes of $9.5bn on behalf
of governments around the world. A more detailed geographical
breakdown of the taxes paid in 2020 is provided in the ESG Data
Pack. The tax we paid during 2020 was higher than in 2019 due to
differences in the timing of payments, particularly in Hong
Kong.
$3,873m $386m
Tax on profits Withholding
2019: $1,988m taxes
2019: $282m
$1,121m $1,011m
Employer taxes Bank levy
2019: $1,041m 2019: $889m
$1,389m $278m
Irrecoverable Other duties
VAT and levies
2019: $1,164m 2019: $227m
$3,022m $3,911m
Europe Asia-Pacific
2019: $3,077m 2019: $1,487m
$299m $382m
Middle East North America
and North Africa 2019: $314m
2019: $313m
$444m
Latin America
2019: $400m
$3,462m $3,595m
Europe Asia-Pacific
2019: $3,636m 2019: $3,288m
$90m $1,089m
Middle East North America
and North Africa 2019: $876m
2019: $127m
$1,302m
Latin America
2019: $1,379m
74 HSBC Holdings plc Annual Report and Accounts 2020
Restoring trust
Restoration of trust in our industry remains a significant
challenge as past misdeeds continue to remain in the spotlight. But
it is a challenge we must meet successfully. We owe this not just
to our customers and to society at large, but to our employees to
ensure they can rightly be proud of the organisation where they
work. We aim to act with courageous integrity in all we do. This
guiding principle means having the courage to make decisions based
on doing the right thing for customers and never compromising our
ethical standards.
The chart below sets out fines and penalties arising out of
major investigations involving criminal, regulatory, competition or
other law enforcement authorities, and costs relating to PPI
remediation. We have sought to learn from these past mistakes and
are seeking to develop and implement specific measures designed to
prevent recurrence of similar events in the future. Further
information regarding the measures that we have taken to prevent
the recurrence of some of these matters can be found at
www.hsbc.com/who-we-are/esg-and-responsible-business/esg-reporting-and-policies.
Major criminal and regulatory fines and penalties and PPI
remediation(1)
Pre- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
AML-related
investigations
Global
Private
Banking
tax-related
investigations
RMBS-related
investigations
Libor/Euribor
FX-related
investigations
PPI
Key
Duration of conduct period $m Fines/penalties/other costs
1 This chart only includes fines and penalties arising out of
major investigations involving criminal, regulatory, competition or
other law enforcement authorities,
and costs relating to PPI remediation. The chart reflects the
year in which a fine, penalty or remediation cost was paid, which
may
be different from when a loss or provision was recognised under
IFRSs. Settlements or other costs arising out of private litigation
or arbitration proceedings
are not included.
HSBC Holdings plc Annual Report and Accounts 2020 75
[1] The Bahamas, Bermuda, the Cayman Islands, Guernsey, Ireland,
Jersey and the British Virgin Islands.
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END
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