HSBC launches forest sector guideline

28 May 2004

At its Annual General Meeting today, HSBC launched a new international guideline for the forest land and forest products sector. The guideline will ensure that HSBC’s involvement in this potentially sensitive sector is consistent with its longstanding commitment to the environment.

The guideline, which includes lending and other forms of financial assistance, sets out broad principles of good forest management and covers the following industries and activities: forestry; timber and timber products/processing; timber trading; plantations (pulp, timber, oil palm, rubber); forest conversion. It is based on widely adopted international standards which are considered acceptable to a number of stakeholders, including industry participants, multi-lateral development agencies (eg, World Bank, IFC) and the main environmental non-governmental organisations.

In September 2003 HSBC adopted the Equator Principles, a set of voluntary guidelines developed by major international banks, that establish a common framework to address the environmental and social issues that arise in financing projects and ensure that they are realised according to sound environmental management practices. The guideline announced today demonstrates our commitment to the Equator Principles in relation to the forest land and forest products sector.

HSBC’s preference is to deal with customers in this sector that are either operating managed forests that are certified by the Forest Stewardship Council (FSC), or equivalent FSC recognised standard, or trade in products that are FSC certified or equivalent. This includes clients who are not FSC or equivalent certified but are following a credible path towards achieving compliance.

The FSC Principles cover the impacts on affected societies, such as land title and land use rights, the rights of indigenous peoples, community relations and workers’ rights and economic benefits from forest land use.

In 1992 HSBC became a founder signatory of the United Nations Environment Programme’s Statement by Financial Institutions on the Environment and Sustainable Development. In 2001 it became a corporate member of the United Nations Global Compact which challenges companies to demonstrate progress in supporting and advancing its principles in three areas, labour standards, human rights and environmental responsibility.

As part of its commitment to the environment HSBC launched Investing in Nature in February 2002, a five year $50 million partnership with Botanic Gardens Conservation International (BGCI), Earthwatch and WWF. The partnership aims to save 20,000 rare plant species from extinction, clean up three of the world’s major rivers, benefiting 50 million people who depend upon them, train 200 scientists and send 2,000 staff on vital conservation research projects worldwide.

Notes:
The Forest Stewardship Council (FSC) is an international body, which accredits certification organisations to certify timber and forest products as FSC compliant. The FSC was developed jointly by the industry and environmental groups, is currently the only internationally agreed forestry standard with global application and therefore has a high level of acceptance. For this reason the Group has accepted the FSC as its own standard of good forest management. More details on the Forest Stewardship Council can be obtained from their website http://www.fsc.org/