Edited from a press release by HSBC

HSBC, the world’s first major bank to become carbon neutral, has announced its strategy to help clients respond to the challenges and opportunities of creating a lower carbon economy. It will advise them on the implications of climate change and the business opportunities that arise. HSBC has also issued its Energy Sector Risk Policy, giving guidance on environmental and social standards accepted by the industry and other stakeholders as representing good practice.

Jon Williams, Head of Group Sustainable Development, HSBC Holdings plc, said: “HSBC will work with our clients and help them become more energy efficient and to deploy new lower carbon technologies. The Group will simultaneously support clients who are developing and growing low carbon, clean technology, and non-fossil fuel energy solutions, such as renewable energy technologies.”

“HSBC’s leadership in climate change, coupled with its ability, through a global network, to work with organisations of all sizes – from small and medium sized enterprises through to global multinationals – positions us well to assist organisations to realise their low carbon ambitions.”

HSBC will continue to support traditional fossil-fuel based technologies subject to social and environmental standards being met and encourage moves towards energy efficiency and lower carbon fossil-fuel technologies. Simultaneously the bank will support technologies that are commercially and technically viable, such as windpower, solar power, biofuels, and methane capture. Global investment in renewable energy hit US$55 billion in 2004.

Steve Howard, Chief Executive Officer, The Climate Group, said: “Recent record prices for oil, the need to meet international commitments to reduce greenhouse gases under the Kyoto Protocol, and demands for increased energy security and independence have driven the growth in low carbon and renewable energy. Organisations such as HSBC that have the foresight to take advantage of these opportunities not only contribute to sustainability, but will also be well-positioned to benefit from an increasingly carbon-constrained world.”

New Energy Sector Risk Policy
HSBC’s Energy Sector Risk Policy is the fourth in a series of sector guidelines that reinforce its commitment to sustainable development. HSBC has previously released policies on the Forest Land and Forest Products Sector, the Freshwater Infrastructure Sector and the Chemicals Sector.

The policy provides guidance on the standards accepted by the industry and other stakeholders as representing good practice. Where applicable, this entails compliance with global or regional standards such as the Kyoto Protocol or the EU Emissions Trading Scheme. Where there is no equivalent standard, HSBC will look to its clients to meet the emissions standards published by the International Finance Corporation. Clients are also encouraged towards best practice in areas such as the disclosure of emissions, which will be mandatory for certain project finance transactions.

The policy prohibits the provision of financial services which directly support operations in UNESCO World Heritage Sites. Building on the existing sector policies, it also prohibits direct support of operations in sensitive areas such as wetlands listed under the Ramsar Convention, Primary Tropical Moist Forest, High Conservation Value Forest and Critical Natural Habitats.