HSBC revamps deforestation policy after Greenpeace investigation
HSBC has launched a new zero-deforestation policy following a Greenpeace investigation which linked the banking corporation to organisations that have been destroying Indonesia's rainforests.
Europe’s largest bank has strengthened pledges to refuse finance for companies that clear forests and peatlands. The new policy will require HSBC customers to commit to protecting natural forest and peat by 30 June 2017; identify and protect forests and peat in new plantations prior to commencing new development, and provide independent verification of their commitments by the end of 2018.
“HSBC does not and will not knowingly provide financial services which directly support palm oil companies which do not comply with our policy," reads a company statement. "We will always investigate credible evidence that companies may not comply with our policies, but we are not aware of any current instances where customers are alleged to be operating outside our policy and where we have not taken, or are not taking, appropriate action.
“We recognise that the finance sector can play a greater role and that the wider market participants – growers, processors, consumer goods companies, NGOs and banks – can work together more successfully to promote a sustainable palm oil sector. We will play our full part.”
The bank has also revealed that it will join the Tropical Forest Alliance, hosted by the World Economic Forum, and will seek to become a member of the Banking Environment initiative, which is linked to the Cambridge Institute for Sustainability Leadership.
‘Good first step’
The announcement follows last month’s Greenpeace International report which alleged that HSBC had formed part of a funding syndicate that offered $16.3bn in loans to six palm oil companies accused of destroying vast areas of rainforest and peatland in Indonesia. The report claimed that the available funds have been used by palm oil contractors that have been subject to Roundtable on Sustainable Palm Oil (RSPO) complaints or suspension. Hundreds of thousands of people have since joined a campaign to change the bank’s policies, including 30,000 HSBC customers.
Sustainable sourcing of palm oil has proved a major challenge for firms attempting to strengthen supply chains. A recent study estimated that smoke from forest fires, which are fuelled by plantation companies clearing forests and draining peatlands, caused more than 100,000 premature deaths across South East Asia in 2015.
Commenting on HSBC’s new pledge, Greenpeace Indonesia's forest campaigner Annisa Rahmawati said: “Our rainforest is being carved up at a frightening rate and high street banks all over the world are funding this destruction.
“HSBC's commitment to break its ties to destructive palm oil companies is a good first step and Greenpeace will be watching closely to make sure it delivers. This also sends a clear signal that other global banks must follow suit.”
London-headquartered HSBC has recently stepped up its efforts to shift towards a resource-efficient, low-carbon economy, while helping its business customers to make improvements to their sustainability practices. In 2015, the bank partnered with a specialist consultancy to assess more than 200 suppliers of promotional and branded items for ethical and responsible risks in their business practices
HSBC has also committed to cut its annual carbon emissions per employee from 3.5 tonnes in 2011 to 2.5 tonnes by 2020, and vowed to source 25% of its energy from renewable sources by the end of the decade.
The bank has also stepped up its support projects proposed by employees to reduce its environmental footprint. Schemes financed by HSBC in recent times include LED lighting trials, PV panel installations, organic waste composting pilots, energy management system pilots and a number of initiatives that have increased efficiency in group data centres.