HSBC is the latest among leading financial institutions to commit to addressing climate change and other environmental issues.
A perfect storm, to use an apt metaphor, of circumstances and concerns has come together to make climate change, green computing and environmental protection prominent topics in banking. Thanks to a combination of education, public awareness, globalization, Al Gore and corporate self-interest, a growing number of banks are very publicly making environmental responsibility part of their business agendas (see Bank of America Eco-Friendly Skyscraper Sets Tone For Bank Environmentalism). Interest in "going green" even has reached some of the largest businesses in the world.
For example, last month HSBC announced the creation of a five-year, $100 million program to combat climate change worldwide. The HSBC Climate Partnership will embark on several initiatives, including helping five major cities (Hong Kong, London, Mumbai, New York and Shanghai) respond to the challenge of climate change; creating "climate champions" worldwide who will undertake field research and bring back knowledge to their communities; conducting what the bank says is the largest-ever field experiment to measure carbon and the effects of climate change; and helping protect some of the world's major rivers (including the Amazon, Ganges and Thames) from the impacts of climate change. According to HSBC Group Chairman Stephen Green, "Over the next five years HSBC will make responding to climate change central to our business operations and at the heart of the way we work with our clients."
A global financial institution such as HSBC clearly has legitimate concerns and opportunities relating to these issues, from the types of investments and loans it makes to the markets it enters and the locations of its facilities. But banks that are pursuing environmental sustainability as a business strategy are going to have to be careful to avoid any perceptions of "do what we say, not what we do." A recent article in BusinessWeek reported that many global banks actually have increased greenhouse gas emissions -- largely due to reliance on technology that requires electricity -- including HSBC, which said its greenhouse-gas emissions rose 23 percent in 2006, or 7 percent per full-time employee.
As with any other business/technology-related challenge, no one should expect any easy solutions to the "banks and climate change" issue. But there does need to be recognition that with leadership comes scrutiny -- and accountability.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio