Sustainable Finance

Climate change presents both risks and opportunities for our business. As an adviser, lender and investor, HSBC can play an important role in encouraging the companies and projects we finance to manage climate change-related risks and opportunities.

We proactively include sustainability as a core part of our business, incorporating environmental criteria into our lending policies to support our clients in building environmentally-sustainable businesses. We pursue business opportunities in the field of sustainability and partner with environmental organisations to assist them with their projects.

HSBC is committed to the principles of corporate sustainability - sustained profit growth, building enduring customer relationships and managing the social and environmental performance of our operations. We work closely with our clients to manage the credit and reputational risks of businesses that we finance to ensure they meet the criteria for sustainable development.

Risk Management

The climate principles

HSBC today formally adopts The Climate Principles, a framework for climate change best practice for the financial sector. The Climate Principles will not only guide operational greenhouse gas emission reduction commitments, but also provide strategic direction across the full range of financial products and services including research, asset management, retail banking, corporate banking, insurance and re-insurance, investment banking and project finance. It is intended to align with, and build on, existing initiatives to ensure a consistent and effective approach to addressing climate change.

Sector guidelines

Since 2004, HSBC has introduced sector guidelines to cover lending and financial services with potentially high environmental or social impacts. These set out internationally accepted standards to be followed when we lend to or invest in companies or projects in industry sectors such as forestry, freshwater infrastructure, chemicals, energy, metals and mining, and specify areas where involvement is prohibited.

Equator Principles

In 2006, HSBC played a major role with other leading financial service companies and the International Finance Corporation to re-launch the Equator Principles (EPs) - global environmental and social guidelines for project finance.

This upgraded the social and environmental standards applying to financing projects and requiring greater transparency of reporting. The EPs have been re-adopted by 52 financial institutions representing more than US$50 billion or 80 per cent of global project financing.

Business Development

On the Global front

Climate change as a strategic issue

Climate change is not just an environmental issue, but an economic and social one and one that has an impact on HSBC's business strategy.

To better understand the socio-economic implications of climate change, HSBC has appointed Lord Nicholas Stern - a world authority on the economics of climate change - as Special Adviser to the Group Chairman on Economic Development and Climate Change.

We have also established the Climate Change Centre of Excellence in Bangalore, India to assess business risks and opportunities arising from climate change for the benefit of the Group's business and clients.

Investing in climate change

The HSBC Climate Confidence Index 2007 surveyed 9,000 people across nine major markets to explore consumer attitudes towards climate change. It also provided an indication of how governments, businesses and individuals are influencing and involving customers around the world.

The HSBC Global Investment Funds (GIF) - Climate Change, which is benchmarked to the Index, offers investors greater choice to capture climate change opportunities. The Fund invests in companies that are considered best placed to benefit from developing solutions to the challenges of climate change.

Local solutions for local needs

Rewards Programme

In HSBC, we not only run business in a sustainable way, we also involve our customers. All year long, our credit card holders earn special points, which later on they can convert into cash donations to one of the following charities:

• Mauritian Wildlife Foundation
• Caritas Ile Maurice
• SOS Children's Village Mauritius
• Mauritius Red Cross Society