Investing In Sustainable Finance With HSBC’s Kelly Fisher

As corporations doing business, we all, for the most part, want to do the right thing. But if no one is paying for sustainability or Corporate Social Responsibility (CSR) efforts or no one sees business value or an ROI for the cost of implementing these practices, they will become even more difficult to achieve.

I wanted to take a deeper dive into the financial side of sustainability and recently sat down with Kelly Fisher, SVP/Head of Corporate Sustainability at HSBC, one of the largest banking and financial services institutions in the world, serving millions of customers through its four Global Businesses.

Kelly provided clear insights into the definition of sustainable finance, the variety of ways HSBC works with its clients to become more sustainable, investments the company is making into its own sustainability, as well as how organizations should evaluate the progress and success of their sustainability initiatives. Kelly’s key takeaways are below.  

• A Career In Sustainability Isn’t Always A Direct Path: I always advise people who come to me and say I want to get into this field that it is not like being a lawyer or doctor where you know exactly every step. When I started my career at Goldman Sachs, I didn’t know this was a job. I ended up falling backwards into this career by first doing volunteer work. Goldman Sachs has one of the industry leading global volunteer programs which I helped manage. From there, I went to Toyota for seven years which was an incredible experience because I had the privilege of directing millions of dollars toward vehicle safety programs, environmental programs, and cause marketing programs to help educate parents and families on how to keep their families safe and how to minimize our environmental footprint. Now I’m at HSBC where I cover volunteers and strategic programs tied to the business as well as sustainable operations regarding the bank’s own footprint.  (0:44)
• What Sustainable Finance Means: For HSBC, sustainable finance is finding innovative ways to ensure our clients are supported as they transition their businesses to have less of an impact on the world. As you know, a lot of the things can’t happen unless there is financing for it. For example, if you’re a major shoe company and you know you can change the way you manufacture one of your shoes and make it from recycled materials, that’s great. The impulse to want to do that is the right thing, but if you don’t have the funding in the company right now to do that, a loan from a bank who believes it needs to happen, can make it happen. One of the most exciting examples of what we’ve done to date is with Wal-Mart. They have one of the world’s largest supply chains and have an enduring commitment to environmental sustainability. What we’re doing now with them is simply tiering the way their suppliers are paid depending upon an impartial rating of how sustainable they are. (3:14)
• How The Financial and Sustainability Departments Can Work Together: For most sustainability professionals, it’s never occurred to us to go to our CFO and finance teams and ask how we can partner on achieving a sustainability goal. I always know I’m talking to a company that’s leading the way in sustainability when I get in a room with the sustainability team and say, “Do you know your CFO? Do you know your finance team?” When those conversations have already progressed, it means they are closer to making something happen because someone has to pay for something in order for change to happen. (5:10)
• Why It Is Important For A Business To Value Sustainability: It’s a real sign of success when everyone thinks sustainability is a part of their job. It’s not having this sustainability or CSR team over there and occasionally they come in the room and everyone feels guilty and they say, “Fine, we’ll do that.” It’s really meaningful when it’s tied into everyone’s scorecard and their performance. HSBC is absolutely leading on that. We announced some really aggressive net zero commitments toward the end of last year which are not just net zero for our own footprint. It’s net zero for our balance sheet, which is very aggressive, very challenging, and very important to us because we’re saying, okay, to our clients, we want to be your bank, but we want to help you transition where you need to be over the next several decades. (5:47)
• How You Can Tell Sustainability Is The Way Forward: More and more people are working it into their daily jobs. The amount of people who come to me now and want to bring me to a client meeting and talk about the sustainable finance products we have to offer or the way we share their values has increased exponentially year over year over year. The real turning point for me was last year because 2020 was awful for everyone and I think some of us in the field were very afraid we would see it be a year where people said, “let’s set aside this green agenda for a while because this is going to be a year of crisis,” and we actually saw the opposite. HSBC, for example, was the first to the market early in the spring with research that showed ESG stocks were outperforming other stocks in the market volatility which happened in April. That was incredible. And that’s what investors are always nervous about. “Well, wait, of course I want to invest in companies that have better ESG performance, but I also want a return.” And then we were the first to market with a COVID bond in Asia and we saw a lot of our clients stepping forward and saying, “You know, what you’re doing with this on green, we want to do that with some social, some sustainable finance products that would support our social activities.” So, the fact that instead of people sitting to the side last year and saying, “I’ll get back to that later,” they’re actually doubling down on the activities they’re doing around ESG and sustainable finance, gives me even more cause for hope as we come out of this crisis together. (7:05)
• The Types Of Sustainability Initiatives HSBC Is Investing In: Our bankers are very tuned into what our clients are asking for. I’ve been able to see firsthand where they’ve said, “We don’t have something for that yet, but we’re going to go off and come back to you with something.” In my area, I am a charitable budget. I have a fill-in profit budget. It’s not hugely significant the way our dollars out of London are and what matters to me is always just looking at where the greatest needs are. We just came out at the end of last year with a research project we did with NYU. They’re starting a School for Sustainable Business and conducting research which any apparel company could use if they are struggling to prove sustainability initiatives will pay off over time. It gives them a tool to prove there will be return. It’s called “Return On Sustainable Investment” or ROSI for short. This is a great way for me to invest. It’s going to help any company in the apparel retail sector make meaningful changes. So that’s how I try to use our budget to be a catalyst for things we want to see and significant changes we want to see happen. (9:12)
• How You Know You Are Making The Progress You Want When Evaluating The Performance Of Your Team: The way things get measured is so, so important. I think we are doing an excellent job right now at both measuring short- and long-term results. The net zero commitment we made at the end of last year has a 750 billion to 1 trillion-dollar sustainable finance investment commitment. We do track that and last I checked, we were one of the few banks which actually has a sustainable auditor come and review how we report and what we say is green which is also really important to us. But that’s massive and that’s long term. What really, really matters is when we look at the really short-term things. How many client discussions have we had about sustainability? How many new products have we been able to offer? How much new research have we financed which is making a difference? If we can measure some short-term things we are doing and then still look at those long term, it balances. It keeps you in check of, okay, let’s not just look at big numbers, let’s not just look at big dollar figures, let’s look at those short-term goals as well because I think sometimes you will see some really qualitative things coming through in the short term which mean you are still headed in the right direction. Overall it is not easy and one of the conversations which is constantly brought up when you’re in a room full of sustainability people is “How are we measuring, are we measuring the same way, and I think with the new administration coming in the US, you’re going to see conversations around measurement and reporting systems like TCFD (Task Force on Climate-Related Financial Disclosures) becoming even more prominent. When it’s measured in the same way which is transparent and fair, that’s treating this work with the right respect that we treat finance or other things that get measured and reported in a very impartial and consistent way. (11:39)
• What HSBC Should Be Known For As It Relates To Sustainability: I would love it if all of our clients asked what we could do to help them achieve their sustainability goals. I think we are not known as well as we could be in the U.S. We’re so known in Europe, we’re so known in Asia, and I think it would be incredibly exciting if we were known here as the bank that is the sustainable bank helping these leading companies like the work we’ve done with Wal-Mart. We were the first bank to help two big insurance companies issue green bonds last year, which is huge for the insurance industry. If we could be known for this, I think that’s really exciting because at some point, I don’t even think it’s going to be a label — it is going to be a way we have to do business. (14:40)

Jennifer Wong: Welcome back to The Business of Sustainability. Today we have Kelly Fisher joining us. The SVP and head of corporate sustainability at HSBC. Welcome, Kelly. 

Kelly Fisher: Thank you. 

Jennifer: Well, I’d love to hear more about your role at HSBC but to start things off, can you tell me more about your career journey that led you to your role and to HSBC. 

Kelly: Sure. And that’s always a good question because it’s not a job that has a normal career path. You know, I always advise people that come to me and say I want to get into this field. It’s not like being a lawyer or a doctor, right? Not where you study, you know exactly every step. I started my career at Goldman Sachs and didn’t know that this was a job. But luckily, I had a friend who was a recruiter for the bank, and she knew me personally. She knew I’d be volunteering my whole life and I ended up falling backwards into this career that I just love, and I feel so grateful every day that I found it. So, I started my career doing volunteer work. Goldman Sachs has, I think still, one of the industry leading global volunteer programs. So, I helped manage that program. I helped oversee the internal campaign to promote it. From there I went to Toyota for 7 years which was an incredible experience and very different. It was not volunteer, or employee engagement focused, but instead I had the privilege of directing millions of dollars toward vehicle safety programs, environmental programs, and really caused marketing programs to help [2:00] educate parents and families on how to keep their families safe and all of us on how to minimize our environmental footprint. That was incredibly inspiring. And from there, now I’m at HSBC and my job has widened even further. So now I cover volunteers and really strategic programs tied to the business, but I’m also now involved in sustainable operations. You know, what is the bank’s own footprint? And a totally new area for me, sustainable finance. 

Jennifer: Can you describe what sustainable finance means? Is it different at HSBC versus the industry? I’d love to learn more. 

Kelly: Sure. Well, it’s a new area so I’m not surprised that you haven’t had a lot of discussions about it yet. It’s a really exciting area and to boil it down and put it simply, we all want to do the right thing, right? But if no one is paying for it, if no one is financing it, its harder than you think. So, at its core, what sustainable finance means for a bank like HSBC, and we’ve been recognized as one of the world leaders. You know, euro money, best global bank for sustainable finance two years in a row now. What it means for us is finding innovative ways to make sure that our clients are supported because all of our clients want to transition. They want their businesses to have less of an impact on the world, but a lot of the things can’t happen unless there is financing for it. So, if you’re a major shoe company and you know that you can change the way that you manufacture one of your shoes and make it from recycled materials, that’s great. And the impulse to want to do that is the right thing, but if you don’t have the funding in the company right now to do that, a loan from your bank, [4:00] a bank that believes in this and believes that needs to happen can make that happen. I think one of the most exciting examples of what we’ve done during my time is with Wal-Mart. They have one of the world’s largest supply chains. They’re an incredible company that has really had a long commitment to environmental sustainability. But what we’re doing now with them is simply tiering the way that their suppliers are paid differently depending on an impartial rating of how sustainable they are. 

Jennifer: It’s something that every business can draw thinking about how to incorporate supply chains and partners into their own sustainability strategy because there is only so much you can do yourself as a company, but enabling your ecosystem is really where that larger impact really happens. 

Kelly: And I think for sustainability professionals, it’s never occurred to us that we can go to our finance, our CFO and our finance teams and ask how we can partner on this. And I always know I’m talking to a company that’s leading when I get in a room with the sustainability team and I say, “Do you know your CFO? Do you know your finance team?” And they say yes. When those conversations have already progressed, it means that they are closer to making something happen because unfortunately, someone has to pay for something in order for change to happen, right? 

Jennifer: Sure. And I’m curious about your role at HSBC in terms of how the business values sustainability. What are some of those kinds of tangible outcomes or results that you’re able to drive for the business by focusing on this? 

Kelly: It’s a real sign of success when everyone thinks that sustainability is a part of their job. BSR and other organizations have been saying this for decades that if I’m good at my job, I actually think [6:00] eventually I’m going to put myself out of business because that’s the way a leading company would do it, right? It’s not having this sustainability or CSR team that is over there and occasionally they come in the room and everyone feels guilty and they say, “Fine, we’ll do that.” It’s really meaningful when it’s tied into everyone’s scorecard and their performances. And I think HSBC is absolutely leading on that. Our global CEO Knoll Quinn is incredibly passionate about this topic and we announced some really aggressive net zero commitments towards the end of last year. And it’s not just net zero for our own footprint. It’s net zero for our balance sheet, which is very aggressive, very challenging, but very important to us because we’re saying, okay, to our clients, we want to be your bank, but we want to help you transition where you need to be over the next several decades. So, I guess, what you’re asking about is how do we see success through the business, right? How do we know that its starting to succeed? More and more people are working it into their day jobs. And I’ve been in this role for 5 years, the amount of people that come to me now and want to bring me to a client meeting and talk about the sustainable finance products that we have to offer, or just the shared values, the way we share their values has increased exponentially year over year over year. But, you know, the real turning point for me was last year because it was a horrible year. 2020 was awful for everyone. And I think some of us in the field were very afraid that we would see it be a year where people said, let’s set aside this green agenda for a while because this is going to be a year of crisis and we actually saw the opposite. So, HSBC, for example, we were the first to the market early in the spring with research that showed ESG stocks were outperforming [8:00] other stocks in the market volatility that happened in April. That was incredible. And that’s what investors are always nervous about. “Well, wait, of course I want to invest in companies that have better ESG performance, but I also want a return.” So that was incredible. And then we were the first to market with a Covid bond in Asia and we saw a lot of our clients stepping forward and saying, “You know, what you’re doing with this on green, we want to do that with some social, some sustainable finance products that would support our social activities.” So, the fact that instead of people sitting to the side last year and saying, “I’ll get back to that later,” they’re actually doubling down on the activities they’re doing around ESG and sustainable finance, gives me even more cause for hope as we come out of this crisis together. 

Jennifer: You mentioned some different sustainability initiatives, whether its net zero, or Covid bonds, how do you determine what sustainability initiatives to focus on across the company? 

Kelly: Well, I don’t want to speak on behalf of our bankers because I don’t determine which sustainable products we’re going to create, although, I know that they’re very tuned into what our clients are asking for. They’re such good listeners, they have such great conversations and relationships with our clients, and I’ve been able to see that firsthand where they’ve said, “We don’t have something for that yet but we’re going to go off and come back to you with something.” In my area, I am a charitable budget. You know, I have a fill in profit budget. And it’s not hugely significant the way our dollars out of London are and what matters to me is always just looking at where the greatest needs are. So great example, we just came out at the end of last year with a research project we did with NYU. They’re starting a business school business for sustainable business, School for Sustainable Business. And its research that any apparel company could use if they’re struggling to prove that [10:00] sustainability initiatives will pay off over time, it gives them a tool to prove that there will be return. It’s called return on sustainable investment or ROSI for short. So that’s a great way for me to invest, fill and profit dollars, right? 

Kelly: Because it will help some of our clients, but a rising tide lifts all boats. It’s going to help any company in the apparel retail sector to make meaningful changes. So that’s how I try to use our budget, our fill and profit budget to be a catalyst for things we want to see, significant change that we want to see happen. 

Jennifer: When you think about making progress against sustainability, some of these initiatives that you’re speaking about have a massive impact, some of them are very long term as well, how do you know that you’re making the progress that you want to be making when you evaluate the performance of your team? 

Kelly: It’s such a great question and it’s such a hot topic for everyone because a lot of experts say that there was a shift, right, 20, 30 years ago to really pressuring CEOs and boards to just, quarterly returns, earnings calls, right? That’s the opposite of sustainability. 

Kelly: Now I think we’re starting to see that shift back where you’ve got activist and investors in the room that are saying, “Great, those returns sound great, but I am concerned about XY, and Z in what I’m seeing sustainability or in diversity and inclusion.” That’s such an important shift. So, you’re absolutely right that the way things get measured is so, so important. So, I think that we are doing an excellent job right now at both measuring short- and long-term results. So that net zero commitment that we made at the end of last year, it has a 750 billion to 1 trillion-dollar sustainable finance investment commitment. [12:00] That’s huge, right? And we do track that and last I checked we were one of the few banks that actually has a sustainable auditor come and review how we report, what we say is green which is also really important to us. But that’s massive and that’s long term. So, I think what really, really matters is that then we look at then really short-term things. How many client discussions have we had about sustainability? How many new products have we been able to offer? How much new research have we financed that’s making a difference? We did another piece of research last year that I thought was really important in bridging the E and S of ESG with NYCEEC, which is an organization here in New York City that is a green bank that is using financing to energy retrofits of low-income buildings. Incredibly important, right? Because low-income communities of color, disproportionately affected by climate change. So, I think if we can measure some short-term things that we’re doing then, and then still looking at those long term, it balances, right? It keeps you in check of, okay, let’s not just look at big numbers, let’s not just look at big dollar figures, let’s look at those short-term goals because I think sometimes I think you’ll see some really qualitative things coming through in the short term that mean you’re still headed in the right direction. 

Kelly: But its not easily and I think it’s one of the conversations that is constantly brought up when you’re in a room full of sustainability people is how are we measuring, are we measuring the same way, and I think with the new administration coming in the US, you’re going to see conversations around measurement and reporting systems like TCFD becoming even more prominent.

Jennifer: Yeah, I think that will be fantastic to have more transparency and accountability. Maybe some more consistency as well just because sustainability in itself is already so different from one company versus another. [14:00] But I think everyone is at least optimistically moving in the same direction. 

Kelly: And when it’s measured in the same way that’s transparent and fair, that’s treating this work with the right respect that we treat finance, or other things that get measured and reported in a very impartial and consistent way. This work deserves that respect, right? 

Jennifer: For the average client that is banking with HSBC, what’s something that they might not know about sustainability for the company? 

Kelly: I would love it if all of our clients asked what we could do to help them achieve their sustainability goals. And like I said earlier, I’ve seen that increase so much that that’s incredibly exciting to me. You know, I think we’re not still known as well as we could be in the U.S. We’re so known in Europe; we’re so known in Asia and for me I think it would be incredibly exciting if we were known here as the bank that is the sustainable bank that is helping these leading companies like the work we’ve done with Wal-Mart. We were the first bank to help two big insurance companies last year, for example, issue green bonds. Huge, right, for the insurance industry. If we could be known for this, I think that’s really exciting because at some point, I don’t even think its going to be a label. This is going to be a way we have to do business.