We consider issues such as climate change and the impact on local communities that can arise from our financing decisions. This allows us to respond to commercial opportunities and at the same time better manage potential risks to our business. We also help our business customers to understand sustainability risks and make improvements to their sustainability practices.
We recognise and support the move to a low-carbon economy, which will help reduce climate change and benefit communities in the long term. HSBC can play a role by financing climate business – the goods and services that will thrive in and accelerate this transition to a low-carbon future. Find out more about how we support Climate Business.
Sustainability risk policies
HSBC seeks to ensure that the financial services we provide to our customers to support economic development do not result in an unacceptable impact on people or the environment.
For more than 10 years, we have been working with our business customers to help them understand and manage their environmental and social impact. HSBC has specific sustainability risk policies covering agricultural commodities, chemicals, defence, energy, forestry, freshwater infrastructure, mining and metals, and World Heritage Sites and Ramsar Wetlands. We also apply the Equator Principles when financing projects.
We engage with customers, where appropriate, and support them in adopting more sustainable practices. We end banking relationships with customers when they are unwilling or unable to comply with our standards. More information about our approach is available in The Introduction to Sustainability Risk Policies.
To make sure our sector policies are implemented consistently, we have invested in more than 70 Sustainability Risk Managers across our business. These risk managers, based in the Credit Risk function, have local or regional responsibilities for advising on and managing environmental and social risks, and play a key role in the approval process for high-risk relationships or transactions.
Sustainability Risk Managers are supported by Group Sustainability Risk, a central team responsible for developing policies, guidance, processes and training. In 2015, the Group Sustainability Risk team formally became part of the Group Risk function, to help simplify communication and further improve implementation of the sustainability risk framework.
In 2015, we held training sessions with more than 1,600 risk and relationship managers in attendance. This training included senior leaders who attended HSBC’s Risk Management for Leaders programme, the Project and Export Finance team, and relationship managers across HSBC’s Commercial Banking and Global Banking businesses. In 2016, we are updating an online training module on our sustainability risk policies and processes to reach all relevant colleagues.
In 2015, HSBC was recognised as a leader in the Forest 500 ranking. This evaluation, carried out by a UK-based think tank, ranks companies, investors and governments on their commitment to deforestation-free policies. We were one of eight companies to be awarded the top score for our approach to financing and investment within the forestry sector.
We continue to engage with customers and stakeholders so we can improve our policies and the way they are implemented. We believe that independent certification schemes can play an important role in banks’ and companies’ management of sustainability risk in global supply chains, and we are supporting the development of selected schemes, for example in the forestry and agricultural commodities sectors.
We regularly review our policies to ensure that they address new and emerging risks as well as stakeholder concerns. In 2016, we conducted a review of our Mining and Metals policy. In light of the Paris Agreement of December 2015 we have included standards on lending to new thermal coal mines, in addition to our existing policies on coal-fired power plants and deforestation. We have also added more specific guidance on adverse human rights impacts which could arise in the mining sector. The revised policy is available in the list above.
Forestry and agricultural commodities
Find out about developments to our forestry and agricultural commodities policies and their implementation.
Find out more about our application of the Equator Principles.