Environmental Engineering Reference
In-Depth Information
ments in the space. For example, as according to
the HSBC sustainability website:
encouragement of microfinance in emerging
credit-strapped markets, building water markets,
and extending banking possibilities in developing
countries such as China, where HSBC is expand-
ing China's rural bank network. This is not to say
that HSBC views sustainability as a charitable
practice. Rather, not insignificant returns are
expected from these high risk endeavors, but the
investment horizon tends to be considerably longer
than many banks are interested in.
These initiatives serve to both expose and hedge
HSBC's practice to carbon, using the resources
available to the bank to manage the risks inherent
in investing in emissions reducing projects and
sustainability programmes such as those men-
tioned below. Through its annual Sustainability
Report, the bank seeks to draw investors to an
environmentally aware business model and dis-
play sustainable finance tools, such as the Global
Climate Change Benchmark Index, launched in
2007 to track listed companies focused on climate
change mitigation.
•
The HSBC Climate Change Centre of
Excellence, established in 2007, investi-
gates the likely economic risks and oppor-
tunities of climate change for the financial
markets.
•
HSBC adopted the Climate Principles, a
voluntary framework for the financial ser-
vices sector to guide its response to climate
change and the move to a lower carbon
economy.
•
The HSBC Climate Partnership a five year,
US$100 million commitment to work with
four leading climate NGOs and engage
HSBC employees in understanding and
taking action on carbon emissions.
•
Building on our commitment to being a
carbon neutral bank, HSBC sets targets to
continue to reduce carbon emissions from
energy and business air travel.
•
The risks from climate change are being
incorporated into the business systems to
protect our buildings, people and opera-
tions from natural hazards (HSBC, 2010).
Strategy in Practice
As part of its commitment to climate change
mitigation, in 2005 HSBC was the first bank and
FTSE100 company to become carbon neutral. A
small part of this was educating employees on
energy saving measures and implementing them,
one project is the upgrading of data storage and
computer processing centres for greater energy
efficiency, cutting down one large amount of
energy needed for cooling. The majority of the
carbon neutrality effort came from emissions credit
purchases from CDM projects. HSBC does not
have a carbon trading desk, it instead relies on
its growing skillset in climate and sustainability
to source credits and finance projects where it
could make a significant impact, and procure the
emissions credits if needed to manage its own
carbon footprint.
Among other initiatives, HSBC is piloting
To manage the strategy, HSBC has produced a
set of policies to cover investments in areas inter-
esting for sustainable investors on both a risks and
opportunities front. This is one set of principles
applicable to large and small businesses alike to
monitor their lending, ensure sustainability is on
the agenda, but protects investors from financial
damage. Among these are the Equator Principles,
a framework for managing environmental and
social risk within project finance understood and
regarded by the financial industry. HSBC devises
a set of policies to govern sector investments to
set out internationally accepted standards to be
followed “when we lend or invest in companies
or projects operating in certain sensitive sectors”
(HSBC, 2010), then standards for reducing emis-
