Download HSBC Forestry and Agricultural Commodities Sector Policies

HSBC Forestry and Agricultural
Commodities Sector Policies
Frequently Asked Questions
March 2014
PUBLIC
Forestry and Agricultural Commodities Sector
Policies– Frequently Asked Questions
1
Why have you changed your forestry policy?
We have had a forestry policy since 2004 and last issued a revised policy in 2008. We review and update our policies
regularly. We have now revised our policy again following feedback from NGOs and others, and an independent review
by Proforest.
2
What has changed?
We have tightened up our checking processes; made our policies more specific to different parts of the forestry industry
and simplified them to make them easier to understand; and set clear deadlines for clients to become certified. We also
now apply our palm oil standards to traders and refiners as well as to growers.
3
What does this mean in practice?
Specifically, we have:
4
·
Separated out our forestry policy into three policies covering forestry including logging; agricultural commodities;
and World Heritage Sites and ‘Ramsar’ Wetlands. This was partly as a result of recommendations from Proforest
and reflects the different issues and management approaches involved in these three types of business.
·
Set a requirement for forestry clients to gain 100% certification by the Forest Stewardship Council or The
Programme for the Endorsement of Forest Certification in high risk countries. Previously we required 70%
certification.
·
Palm oil clients including growers, traders and refiners must become RSPO members by 30 June 2014 and have at
least one operation certified by end of 2014 and all by end of 2018.
What did Proforest say about your policy?
HSBC’s policy compares extremely well with the rest of the sector in terms of its technical scope. Proforest also made
recommendations for improvement, most of which we incorporated. The Proforest report is available at
www.hsbc.com/sustainability.
5
As the palm oil industry has been particularly implicated in negative impacts on the environment and
communities, why don’t you pull out of the sector altogether?
Forests and forest products including palm oil are an important global resource and key to economic development for
many nations. We do recognise that this sector, whilst enjoying unprecedented growth, can result in adverse
environmental and social impacts if it is not approached in a responsible and sustainable manner.
We believe that by engaging with customers in this sector we can have a positive influence. We want to support
sustainable business and, together with consumers, are playing a part in bringing this about. Walking away would take
away a pressure point on producers.
6
Who did you consult as part of the development of the new policies?
We shared proposed revisions to the policies with a wide range of stakeholders including companies, certification
schemes, trade bodies, NGOs, investors and auditors and also internally.
PUBLIC
1
7
Does everyone you consulted agree with the changes?
There are so many widely diverging views on these sectors that it would be impossible to produce policies which are
ideal for all stakeholders. Nevertheless, we believe that the proposed policies do represent a balance of economic,
environmental and social interests.
8
Why are you requiring customers to gain certification – is this the best approach?
We have set deadlines for clients to become certified. If customers are unwilling or unable to achieve the standards we
require by the deadlines we have set, we will end our banking relationships with them.
The forestry and palm oil sectors are in a transition to sustainability, and therefore we believe that independent
certification of forestry and palm oil operations is the most effective way of ensuring that our customers meet our
standards.
We recognise that independent certification needs to be strengthened to make sure that people and the environment
are effectively protected. HSBC will provide support to help RSPO as well as FSC, Bonsucro and the Roundtable for
Responsible Soy to develop their organisations, improve their standards and strengthen their processes.
9
Can you guarantee that you will no longer finance companies involved in deforestation?
Certification prevents the loss of High Conservation Value Forest (HCVF) – which is why we support it.
HSBC supports the growth of legal and sustainable forestry and palm oil. The forestry and palm oil sectors are in a
transition to sustainability, and we believe that independent certification of forestry and palm oil operations is the most
effective way of ensuring that our customers demonstrate that their behaviour is consistent with these principles.
Our agricultural commodities policy makes it clear that we do not finance the conversion of HCVF for oil palm
plantations. We are specifically working to improve and speed up the complaints system of the RSPO so that
companies not meeting standards are identified and issues are resolved or appropriate action is taken.
If customers are unwilling or unable to achieve the standards we require by the deadlines we have set, we will end our
banking relationships with them.
10
How long will it take for you to withdraw financial services from customers who do not meet your standards?
We have contacted all our customers affected by this policy to inform them and if they cannot comply by the deadlines
set we will end our banking relationships with them. This can take some time as we are required by law to meet
contractual terms.
PUBLIC
2