HSBC to cut lending to questionable oil palm and logging companies
Rhett A. Butler, mongabay.comDecember 2, 2008
HSBC has cut lending to oil palm developers and logging companies in Malaysia and Indonesia due to environmental concerns, reports Reuters.
Following criticism by the Forest Peoples Program, an indigenous rights' group, over its failure to disclose the names of its palm oil industry clients, Francis Sullivan, HBSC's adviser on the environment, told Reuters than the bank would terminate relationships with forestry companies having questionable environmental practices.
"We're planning to exit 30 percent of client relationships in the forest land and forest products sector in high-risk countries, including Malaysia and Indonesia, (because) they don't meet our forestry policy," Sullivan was quoted as saying.
Oil palm plantations near Lahad Datu, Malaysia. Photo by Rhett A. Butler
Sullivan also said HSBC was reviewing its relationships with companies involved in oil sands development. Oil sands are known to be a particularly dirty source of energy and supporting development conflicts with HSBC's recent effort to position itself as a leader on climate change and the environment.
Last year the bank gave an $8 million grant to the Smithsonian Tropical Research Institute (STRI) to fund the world's largest field experiment on the long-term effects of climate change on forest dynamics.
Environmentalists say logging and oil palm development are driving large-scale destruction of tropical forests across southeast Asia, especially Indonesia. Recent research has shown that emissions from deforestation and degradation make Indonesia the third largest emitter of greenhouse gases despite ranking as only the world's 20th largest economy. Oil palm plantations have also been linked to social problems and labor abuse. References
Gerard Wynn. HSBC to curb palm oil lending, review oil sands. Reuters December 2, 2008
Rhett A. Butler. HSBC gives Smithsonian $8 million to study global warming impact on forests. Mongabay.com, February 12, 2007
Rhett A. Butler. Malaysian palm oil industry accused of child slavery by Indonesia. Mongabay.com September 17, 2008
Rhett A. Butler. Palm oil industry relies on greenwashing to mislead consumers, alleges report. Mongabay.com October 8, 2008
Rhett A. Butler. The Social Impact of Oil Palm in Borneo. Mongabay.com June 1, 2006