Forestry and agricultural commodities
Development in forest areas can have a major impact on the environment, local communities and climate change. In 2004, HSBC was one of the first banks to introduce a Forest Land and Forest Products Sector Policy covering these issues.
HSBC has progressively raised the sustainability standards it applies to the palm oil sector since it introduced its first policy in 2004. In 2014, we issued new forestry and agricultural commodities policies, with an increased emphasis on our customers obtaining independent certification that their businesses operate legally and sustainably. HSBC continues to be a member of both the Forest Stewardship Council (FSC) and the Roundtable on Sustainable Palm Oil (RSPO), globally accepted certification bodies for the forestry and palm oil sectors, respectively.
In 2017, we further strengthened our Agricultural Commodities policy by expanding our prohibited business commitment, making it consistent with ‘No Deforestation, No Peat and No Exploitation’ (NDPE) policies which are increasingly common in the palm oil supply chain and have been adopted by the RSPO under the 2019 certification revision. HSBC will not agree new financing facilities to customers who do not comply with NDPE commitments. You can read our policy in full on the Sustainability Risk page.
We are pleased that HSBC’s standards have encouraged many customers to become certified since 2014. For example, forestry customers in Mexico, Türkiye and China have achieved FSC certification when otherwise they may not have done so. Additionally, palm oil customers in Indonesia and Malaysia have achieved RSPO certification.
We believe that certification demonstrates that a company is taking sustainability concerns seriously. It also helps protect our customers from reputational risk and can put them in a stronger position commercially because increasing numbers of buyers want to know that products have been responsibly produced.
HSBC continues to support the RSPO. We have been a board member of the RSPO since its inception in 2004. In 2019, in line with promoting good corporate governance, we agreed that another major international bank would take our place. We remain committed to the RSPO and certified sustainable palm oil, and will continue to support continual improvement through our membership of committees or task forces.