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Analysis of HSBC Sustainability Report

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Introduction

Critical Review of HSBCs Sustainability Report. A project submitted as to complete a course on CSR. Sincere thanks to Dr Sujata Mukherjee for guidance in completing the project. CONTENTS Page No Introduction 3 Initiatives Financial Inclusion 4 Environment 5 Employee Volunteering 6 Measurement Indicators 7 Voluntary codes and Standards 9 Challenges 10 Corporate Governance 10 Future Prospects and Critique 11 References 13 INTRODUCTION HSBC - The World's Local Bank Hongkong Shanghai Banking Corporation (HSBC) is one of the largest banking and financial services organizations in the world. Headquarter: London Market Capitalization-- US$180bn Network: HSBC's comprises around 8,000 offices in 88 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. Shareholders: Shares in HSBC Holdings plc are held by around 220,000 shareholders in 119 countries and territories. It is listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges. Shares are traded on the New York Stock Exchange in the form of American Depositary Receipts. Activities: With a wide international network aided by advanced technology and a fast growing e-commerce capability, HSBC provides an inclusive range of financial services: personal financial services; commercial banking; corporate, investment banking and markets; private banking; and other activities. Corporate Social Responsibility "Our goal is not, and never has been, profit at any cost because we know that tomorrow's success depends on the trust we build today. Companies like ours must share responsibility for the environment with governments and citizens for minimising the damaging effects of human activity - pollution of land, water and air and the depletion of resources." (HSBC Holdings plc Sustainability Report , 2011) Corporate social responsibility, or 'CSR', means managing business responsibly and sensitively for long-term success. HSBC aims to address the expectations of its customers, shareholders, employees and other stakeholders. Being one of the world's biggest banks means the decisions it makes can have a big impact. ...read more.

Middle

Employee Volunteering In all the initiatives and programs that HSBC supports, employees are encouraged to participate and volunteer. This program was formally introduced in 2007 and is called "Catalyst". In various events like the Mumbai marathon, world environment day, etc, there is heavy employee participation. Other Initiatives HSBC has contributed to many disaster relief efforts during calamities like Mumbai floods, tsunami and Mumbai blasts (Spirit of Mumbai program). HSBC has also supported conservation of many old and heritage buildings in the city of Mumbai as well as publication of books and festivals. Measurement Indicators Since 2007, HSBC has used the Connected Reporting Framework, an approach to reporting an organisation's environmental footprint and its financial impact. The key principles of this approach are -: * Sustainability issues should be visibly linked to the organisation's strategy by large * Sustainability and financial information should be presented in a more lucid manner to give a balanced picture of the organisation's performance * Consistency should be maintained to aid comparability between years and organisation * Reported information should be aligned with business information HSBC has appointed functional heads of corporate sustainability for IT, corporate real estate and purchasing. Together, they are responsible for an annual spend in excess of US$6 billion. With respect to CO2, the sustainability expenditure on green travel has increased over the past two years while that on energy efficiency has decreased. Here, the total disposal cost has decreased from 5.1m $ to 3.2m $ in 2 years The environmental target-driven savings from improved effeciency has increased to 11.7m$ which indicated HSBC's energy effeciency. 3 HSBC adheres to 6 of the 8 Millennium Development Goals. Voluntary Codes and Standards Equator Principles The Equator Principles are a credit risk management framework for determining, assessing and managing environmental and social risk in project finance transactions. Project finance is often used to fund the development and construction of major infrastructure and industrial projects. ...read more.

Conclusion

In addition the group was engaged in land clearance of deep peat. They contributed majorly in emissions of CO2 thus effecting the environment. Major investment was in Sinar Mas which was busted apparently on two fronts: According to Greenpeace, it was engaging in illegal deforestation practices while misusing its RSPO membership as a buffer and shield. So it was "crafting an illusion of commitment to sustainability" while doing exactly the opposite, namely destroying forests and peatlands . HSBC however does stand by its vision and mission statements which tout it as "WORLD'S LOCAL BANK" as it is engaged in many philanthropic projects as stated earlier. The targets set for the community investments in the future have already been met in three spheres namely employee volunteering, restoring, protecting and managing wetland areas and managing projects in the major cities, so the future prospects are healthy as far as reputation of the company in regard to its CSR initiatives are concerned. Apart from the targets achieved, HSBC being a carbon neutral company ,with its client environmental sustainability requirements, is planning to effect positive change in societies in which its various clients operate. It is projected at a high level in the Dow Jones Sustainability index thus acting as a pioneer for effecting the CSR activities initiated in other companies. Its commitment towards the community can be gauged by looking at the huge amount USD 127.7m (0.9 % of total profits)5 spent on community investment. By promoting the sustainability in China, it is helping to pave the way for many developing countries. HSBC was analyzed in accordance with the sustainability drivers and it was found that it maintains a unique position as a global company capable of large scale projects and influence, both directly and indirectly affecting the global economy and environment. It can thus be said that HSBC is on the right track in regards to the company's sustainability initiative, there are still areas in which it can and it should improve. ...read more.

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