AmazonScience/document-haystack

1ESG review2How we decide what to measure3We listen to our stakeholders in a number of 4different ways, which we set out in more detail 5within the ‘ESG overview’ on page 14. We use 6the information they provide us to identify the 7issues that are most important to them and 8consequently also matter to our own business.9Our ESG Committee and other relevant 10governance bodies regularly discuss the new 11and existing themes and issues that matter to 12our stakeholders. Our management team then 13uses this insight, alongside the framework 14of the ESG Guide (which refers to our 15obligations under the Environmental, Social 16and Governance Reporting Guide contained 17in Appendix C2 to The Rules Governing the 18Listing of Securities on The Stock Exchange 19of Hong Kong Limited), and the LR9.8.6R(8) 20of the Financial Conduct Authority’s (‘FCA’) 21Listing Rules, and other applicable laws and 22regulations to choose what we measure and 23publicly report in this ESG review. Under the 24ESG Guide, ’materiality’ is considered to be 25the threshold at which ESG issues become 26sufficiently important to our investors and 27other stakeholders that they should be publicly 28reported. Our approach to materiality also 29considers disclosure standards and other 30applicable rules and regulations as part of our 31materiality assessment for specific ESG topics 32and relevant disclosures.33Given the recent developments in the ESG 34regulatory environment across various 35jurisdictions in which we operate, combined 36with the relative immaturity of processes, 37systems, data quality and controls, our focus 38remains on supporting a globally consistent 39set of mandatory sustainability standards. 40We aim to continue to evolve our reporting 41to recognise market developments, such 42as the International Sustainability Standard 43Board (‘ISSB’) or the Corporate Sustainability 44Reporting Directive (‘CSRD’), and support the 45efforts to harmonise the disclosures. In this 46Annual Report and Accounts, we continue 47to report against the core World Economic 48Forum (‘WEF’) Stakeholder Capitalism 49Metrics, and Sustainability Accounting 50Standards Board (‘SASB’) metrics and will 51continue to review our approach as the 52regulatory landscape evolves. 53Consistent with the scope of financial 54information presented in our Annual Report 55and Accounts, the ESG review covers the 56operations of HSBC Holdings plc and its 57subsidiaries. Given the relative immaturity 58of ESG-related data and methodologies 59in general, we are on a journey towards 60improving completeness and robustness.61 For further details of our material ESG topics, see 62‘Engaging with our stakeholders and our material 63ESG topics’ on page 15.64 For further details of our approach to reporting, 65see ‘Additional information’ on page 439.66Assurance relating to ESG data 67HSBC Holdings plc is responsible for 68preparation of the ESG information and all 69the supporting records, including selecting 70appropriate measurement and reporting 71criteria, in our Annual Report and Accounts, 72ESG Data Pack and the additional reports 73published on our website.74We recognise the importance of ESG 75disclosures and the quality of data 76underpinning them. We also acknowledge 77that our internal processes to support ESG 78disclosures are in the process of being 79developed and currently rely on manual 80sourcing and categorisation of data. Certain 81aspects of our ESG disclosures are subject 82to enhanced verification and assurance 83procedures including the first, second and 84third line of defence. Assurance assists in 85reducing the risk of restatement, although it 86cannot be fully eliminated given the challenges 87in data, evolving methodologies and emerging 88standards. We aim to continue to enhance our 89approach in line with external expectations. 90For 2023, ESG data is subject to stand-91alone independent PwC limited assurance 92in accordance with International Standard 93on Assurance Engagements 3000 (Revised) 94‘Assurance Engagements other than Audits or 95Reviews of Historical Financial Information’ and, 96in respect of the greenhouse gas emissions, 97in accordance with International Standard on 98Assurance Engagements 3410 ‘Assurance 99Engagements on Greenhouse Gas Statements’, 100issued by the International Auditing and 101Assurance Standards Board, on the following 102specific ESG-related disclosures and metrics:103 – our G104reen Bond Report 2023 (published in 105December 2023);106 – our p107rogress towards our ambition to 108provide and facilitate $750bn to $1tn of 109sustainable finance and investment by 2030 110(see page 49);111 – our112 on-balance sheet financed emissions 113for 2021 and 2022 for six sectors, our on-114balance sheet financed emissions for 2020 115for thermal coal mining, and our facilitated 116emissions for two sectors for 2019 to 2022 117(see page 61); 118 – our119 thermal coal financing drawn balance 120exposures for 2020 (see page 67); and121 – our o wn operations’ scope 1, 2 and 3 122(business travel) greenhouse gas emissions 123data (see page 64), as well as supply chain 124emissions data.125The work performed for independent limited 126assurance is substantially less than the 127work performed for a reasonable assurance 128opinion, like those provided over financial 129statements.130Our data dictionaries and methodologies for 131preparing the above ESG-related metrics and 132independent PwC’s limited assurance reports 133can be found at www.hsbc.com/who-we-are/134esg-and-responsible-business/esg-reporting-135centre.136TCFD137Our reporting around ESG138We report on ESG matters throughout our Annual Report and Accounts, including the ’ESG overview’ section of the Strategic Report (pages 14 to 19), 139this ESG review (pages 41 to 98), and the ‘Climate risk’ and ‘Insights from climate scenario analysis’ sections of the Risk review (pages 221 to 230). In 140addition, we have other supplementary materials, including our ESG Data Pack, which provides a more granular breakdown of ESG information.141Detailed data Additional reports142ESG Data Pack 2023, including  143SASB Index 2023 and WEF Index 2023144UK Pay Gap Report 2023145Modern Slavery and Human Trafficking Statement 2023146Green Bond Report 2023147HSBC UN Sustainable Development Goals Bond and Sukuk Report 2023148 149 For further details of our supplementary materials, see our ESG reporting centre at www.hsbc.com/who-we-are/esg-and-responsible-business/esg-reporting-centre. 150HSBC Holdings plc Annual Report and Accounts 2023 43151ESG review