The current business climate is represented by corporations that have influence on the society and environment. Their influence surpasses the economic well being and extends beyond social responsibility. There is an exponential growth in concern about the world’s environment. A lot of focus is being made on corporations that play or have played roles in recognition of the benefits of using the environment sustainably. As well, a good number of corporations have embraced the need and benefits associated with issues of corporate social responsibility. Corporate Social Responsibility (CSR) simply constitutes the notion that company can basically have influence on resources allocation for their stakeholders’ sole benefit.
Although private sector financial institutions -- like banks -- do not considerably contribute directly to the environmental degradation, they still provide project funding for other organizations whose undertakings directly have impacts on the environment. To be accountable, the environmental reports should be “transparent and represent a genuine attempt to provide an account which covers negative as well as positive aspects of all material impacts” (Adams 2004, p.732).
HSBC’s major corporate social responsibility in Australia is effective and sustainable management of the environment. The company’s donations to reduce climatic change impacts on world forests, rivers, and cities stands out as a positive environmental performance. In undertaking such an initiative, the critical concern is whether or not the company has conducted its business-minded operations in an environmental sustainable manner specifically when dealing with the stakeholders. From the company’s Corporate Social Responsibility Reports of 2005 and 2011, it is noted that the company has been very proactive and active in ensuring that the environment is used sustainably. The company has a well established history of combating environmental degradation and climate change globally in communities where it operates.
For example; in Australia, HSBC has partnered with world class environmental organizations like World Wide Fund, Earth Watch Institute and world climatic groups simply to take action against environmental degradation by businesses, individuals, and governments. Particularly, it has committed itself by giving the largest donations ever to World Wide Fund, whose vision is concerned with environmental conservation, and specifically to combat climate change via using the environment sustainably. In Australia, the most significant environmental challenge in the 21st century for HSBC that have greater impact on its shareholders, customers, employees and the community is climatic change. Thus, as part of its corporate social responsibility through environmental performance, it has entered into various partnerships that seek among other things; to constantly provide protection to rivers and people’s livelihoods that fully rely on them, to continuously carry out research on the effects of climatic change in the long term on world forests, and to effect the creation of greener and cleaner cities. Basically, the company supports organizations with environmental initiatives, i.e. climatic change, terrestrial biodiversity and freshwaters whose focal point is that of building of public awareness, development of environmental policies, and carrying out scientific research simply for the sustainability of the ecosystems.
Equally, HSBC has constantly focused its operations on climatic change, particularly low-carbon energy, water infrastructure, sustainable forestry and related agricultural commodities. It acts as a catalyst and co-ordination point, with much of the subsequent business development being undertaken within the customer groups themselves. For HSBC, in Australia, environmental sustainability constitutes all the opportunities that lie within areas of energy efficiency, low carbon energy production, as well as the adaptation of impacts of the climatic change. The company effectively undertakes these through its established climatic research centre. As well, it has knowledgeable and capable teams to support its transition to low carbon economy.
Since 2005, HSBC has been an environmental performer. In particular, to counteract carbon (IV) oxide emissions resulting from its corporate travel and building operations, the company has adopted the use of emission-offset trading and green technologies. In fact, to counteract negative impact on the climate and on the environment, it has offset 90% of its operations with renewable energy which is solely undertaken using wind power. It has also undertaken to invest in green building. The benefits of counteracting carbon dioxide emission are numerous. By reducing the level of emission, there is likelihood that the level of effect on the ozone layer reduced and consequently, less probability of climatic degradation. This concern thus demonstrates the company’s commitment to environmental sustainability and to the community’s well being in general.
Likewise, HSBC continuously seeks to identify and invest in low-carbon projects. This enables it secure carbon credits that help it offset its own carbon emissions. As well, securing carbon credits help it ascertain that its operations are environmentally credible, cost effective and incremental in the long run. This performance is particularly carried out through lending and investing in institutions with climate change and environmental conservation initiatives. It has specifically funded numerous projects with carbon neutrality. For instance, in the last quarter of fiscal 2005, the company offset carbon dioxide emissions of some fortune amount of tones simply by purchasing equal amounts of credits in projects in Australia. As part of its carbon reduction initiative, the company has initiated a project in Victoria, Australia, which saw the amount of carbon reduced by 15,000 tonnes through organic waste composting. By composting organic waste using aerobic methods, harmful methane gas is replaced by the less harmful carbon dioxide. Consequently, the global warming potential of methane gas is minimized. The emission reduction credits are issued by the Australian Greenhouse Friendly scheme, with an independent party approved by the Australian Greenhouse Office verifying the carbon offset.
On the same note, HSBC’s environmental sustainability is demonstrated by its constant commitment to diverse partnerships which views environmental sustainability and management. For instance, its recent three year commitment to Botanic Gardens Trust as their principal conservative partner signifies how committed the company is to the environment. The Botanic Gardens Trust is a world’s guardian of the world’s plant variety. It is a vital centre for carrying out botanical conservation and research. HSBC as the principal partner has offered vital support through funding to enhance the Botanic Gardens Trust’s conservation program dubbed “Protecting Plants for the Future” both at the local, regional and international levels. This forms part of the company’s global strategy to counteract climatic change. To attain this strategy, the company has entered into a US$100 million five-year HSBC Climate Partnership and the US$90m Global Environmental Efficiency Program. These initiatives suggest that environmental sustainability is at the heart of the strategies of HSBC. The banks partnership with Botanic Gardens Trust simply makes it obvious that the company is committed to carrying out investments in environmental projects solely to benefit the local community and future generations.
HSBC has championed the conservation of plant diversity through partnerships. Regionally, HBSC contributes to long term conservation of both the plants and their habitats simply by offering support to the Botanic Gardens Trust’s and Asia Capacity Building Program. The program is focused on building and sharing expertise among botanic gardens in regions of the Asia Pacific as well as enhancing capacity building. For efficiency and success of the program, HSBC continually support Botanic Gardens Trust. For HSBC Oriental Garden, it has continued to highlight vital programs of conservation by simply showcasing Asia Pacific’s regional biodiversity. In effect, endangered plant and animal species are conserved. Plants conserved consume carbon dioxide and thus reducing ozone layer destruction at the same time. Equally, it has been leading in green initiatives. It has cooperated with World Wide Fund Australia in rolling out carbon footprint calculator and the Low Carbon Lifestyle program whose main aim is to assist the local community in determining and reducing their negative impacts on their environments.
Correspondingly; to further illustrate its environmental performance, HSBC has embraced the use of information and communication technology to green its business operations. The company has integrated diverse ICT to facilitate in greening its business undertakings. As part of its ICT greening initiative, the company has resorted to offer wide range of secure and convenient online services simply to reduce the level of paper usage. Paperless banking initiatives used include Credit Card Statement, E-Statements, Fund Transfers, Telegraphic Transfer, Foreign Exchange, and Online Bill Payments etc. All these online services have significantly reduced the amount of paperwork that not only degrade the environment but also lead to deforestation. It has introduced a credit made of PET G, a chlorine-free material. Its customers also reduce paper consumption by receiving e-statements which is against the paper-printed statements. In essence, the company has made the information and communication technology greener. Specifically, it conducts its meetings using video conferencing. It installs state-of-the-art video conferencing gadgets in its offices to reduce employees’ business travel which has considerably reduced the level of carbon footprint emanating from business travel.
While HSBC’s commitment to environmental sustainability is often described as positive and proactive, it has always not been the case. Despite branding itself as the “The world’s local bank”, its shareholders, stakeholders, the community it operates and the customers are ignorant of the company’s undertakings with their overdrafts, mortgages, and shares. Even though the company claims to be proactive about environmental sustainability as well as combating climatic change, specifically in Australia and worldwide, it has not always been the case. The company has for instance financed organizations that destroy rain forests in Indonesia. As well, the company is linked to Three Gorges Dam in China, which is a very controversial environmental initiative.
Though environmental sustainability is concerned with using the environment today in a manner that does not hinder the future generation from not exploiting its benefits, HSBC has failed the test. For instance, the company financed the destruction of Indonesian forests. It has funded Asia Pulp and Paper (APP), a company recognized by many organizations as accountable for Indonesian rain forests destruction. The forests are habits to the world’s endangered plants and animals. Even though Indonesian paper producers are to blame for the destruction, HSBC remains responsible as it is the company that funds mass destruction and thus noticed as being anti-environmental sustainability. This act has seen most of the forest destroyed. The major subsidiary of APP alone, Indah Kiat, is reported to have destroyed a total of 287,000 hectares of rainforest. In 2000, the subsidiary undertook clear deforestation to source 75% of its logs. APP has cleared more than 3000 hectares of forest. This has constantly put APP, a company funded by HSBC, in conflicts with the local communities. Funding of paper mills is simply like contributing to forests destruction and damaging of helpless wildlife habitats.
As exposed above, the approaches that are being taken by HSBC in Australia to uphold environmental sustainability contradicts with those employed in the rest of the world, specifically in Indonesia. The above evidence in Indonesia on how HSBC is concerned with environmental sustainability signifies that the action which was undertaken by the company was simply to pursue its legitimate financial objective and not to degrade the environment. From the angle, HSBC’s move to fund the deforestation in Indonesia can only be comprehended if viewed from the standing point of the stakeholders needs. In such a circumstance, it would be better for HSBC to accomplish its financial obligations to its stakeholders, i.e. APP, and behave responsible in the overall social context. However, in funding the APP to carry out deforestation in Indonesia, HSBC was subject to implicit social contract which stipulates that harm should never be inflected on any environment. The contract rationally constitute that HSBC would be available to effectively remedy the outcomes to the communities affected as at the time of deforestation and in the future.
In conclusion, HSBC’s environmental actions greatly favor its shareholders, the community as well as its consumers. The company has been very proactive and active in sustainably managing its environment. For the communities in Australia and the world at large, the company has not been negligent on environmental conservation. This is evidenced by the company’s support for carbon dioxide reduction and the funding for the conservation of endangered plant species.
The company’s commitment in creating a sustainable environment is beyond any reasonable doubt. Its partnership with various environmental organizations greatly contributes to reduction of environmental degradation. These partnerships promote research activities aimed at creating green environment, protecting rivers, forests, and creating greener and cleaner cities. The company has offset a substantial percentage of its operations with renewable energy through the use of wind power, and has adopted green technologies to counteract the carbon (IV) oxide emissions. Besides, the company identifies and invests in low carbon projects, thereby fostering carbon neutrality. The company’s green initiatives are a great stride in environmental management.
Be that as it may, HSBC’s actions in some parts of the world are greatly criticized as fuelling environmental degradation. A keen scrutiny of the company’s environmental relationships with the Indonesian community significantly reveals that the company has not been able to meet the environmental needs of the Indonesian community. The company has failed to maintain the social contract while at the same time upholding its stakeholder’s (APP) financial obligations. With the comparisons made in this paper, the proactive and active HSBC’s environmental sustainability is characterized by the manner in which it conducts its environmental corporate social responsibility. It can therefore be said without any fear of contradiction that the company has done more good to the Australian community and its environment more than it has harmed it.
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