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Herweijer dropped from top decision-making body

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New CEO Elhedery says still committed to energy transition

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Investor Epworth says bank putting profits at any cost

By Virginia Furness, Lawrence White and Sinead Cruise

LONDON, Oct 28 (Reuters) - HSBC ( HSBC ) has dropped its chief

sustainability officer from its decision-making executive board,

the bank confirmed on Tuesday as it released quarterly earnings,

sparking concern it could become the latest bank to row back on

its climate commitments.

As part of a strategic overhaul announced last week, HSBC ( HSBC )

downsized its 16-person executive committee, with Celine

Herweijer, group chief sustainability officer, not named on its

new 12-person operating committee, according to the bank's

statements at the time.

New Chief Executive Georges Elhedery declined to comment on

the implications of Herweijer's removal from the bank's senior

decision making body when asked directly by Reuters on Tuesday,

but said the lender "remains committed to supporting the

transition to net zero".

Elhedery's comments on the decision came as HSBC ( HSBC ) reported

better than expected third quarter profit and its new CEO

embarks on a sweeping overhaul of the business aimed at reducing

layers of management and stripping out costs.

Herweijer did not respond to a request for comment.

However, Adam Harper, chief responsibility officer at

Epworth Investment Management, a specialist investment firm

serving UK charities and a shareholder in the bank, said he was

concerned it could suggest a weakening of the bank's

commitments.

"Commitment without action remains cheap talk at HSBC ( HSBC )," he

said. "Time and time again, we've seen the bank make bold

climate claims and then water them down. Removing Celine from

the operating committee is just the latest signal of the bank's

true intentions - profits at any cost."

Climate campaigners argue having a chief sustainability

officer on a company's executive committees is essential to

ensure decision-making reflects the urgency of the climate

crisis and holds institutions to account on their pledges.

It is not the first time HSBC's ( HSBC ) climate credentials have

been called into question by investors. After a campaign by

non-profit ShareAction and institutional investors, HSBC ( HSBC )

committed in 2022 to stop financing new oil and gas fields.

In January, HSBC ( HSBC ) unveiled its first net-zero transition plan

as part of its commitment to reach the target by 2050, laying

out its plans to help the bank's heaviest-emitting clients

decarbonise their businesses.

Banks have pledged to spend trillions of dollars in an

effort to help cap global warming but some of the biggest are

saying that without clear policy direction from governments, it

will be challenging to meet the goal.

Wall Street lender Morgan Stanley ( MS ) last week said it had

lowered its expectations for cutting emissions from its

corporate lending portfolio as the world is moving too slowly to

a greener economy.