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Session 6-1-john-laidlow-responsible-investment-as-a-tool-to-guide-sustainable-production-1477

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Responsible investment and the palm oil industry

Responsible investment and the palm oil industry


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  • 1. Palm oil:Responsible investment as a driver of sustainable productionJohn LaidlowHead of Sustainable BusinessGroup Corporate SustainabilityHSBC Holdings plc6 May 2011
  • 2. The world’s local bankFounded 18657,500 offices87 countries and territories300,000 staff95 million customers221,000 shareholdersMarket capitalisation $191 billion2010 profit before tax $19 billion
  • 3. Sustainability at HSBCDevelopment which meets the needs of the current generationwithout compromising the ability of future generations to meet theirown needs.HSBC’s view of sustainability:Financial stabilityCustomer relationshipsCommunities
  • 4. HSBC’s framework The 3 Ps
  • 5. Policies Forest Land Mining Fresh & Chemicals Energy & water Forest Metals Products
  • 6. ProcessesAnalyse the customer’s potential impacts and ability tomanage them successfully Sustainability Risk Rating - Impact Low Scale of impact Medium High Sustainability Risk Rating - Customer Leader Commitment Compliant Capacity Near-Compliant Track Record Non-Compliant
  • 7. Sustainability risk ratings SRR - Impact High Medium Low No Risk Non-Compliant Near-Compliant SRR -Customer Compliant Leader Not Applicable
  • 8. Management information - 2010 Approved Limits Customers (USD m) Total 580,222 42,968 Leader 22,092 1,066 Compliant 543,826 40,519 Near-Compliant 14,181 1,301 Non-Compliant 123 82
  • 9. PeopleSustainability Risk Managers in 27 countries and regions
  • 10. Forest land & forest products policy including palm oil
  • 11. Forest land and forest products policy• 2004• Loans, advice, trade finance, capital markets• Environmental and social sustainability• Certification• Engagement – 5 years• Plantations • Conversion since 2004 unless no impact on HCVF • No burning • Support RSPO, encouraging customers to join.
  • 12. Palm oil guidance note• RSPO producer certification started in 2008.• Long-term benefits to whole supply chain.• Plantations and mills• Social conflict, biodiversity, climate change and food• Preference for customers to making credible progress with RSPO certification. • Obtained certification or have a credible and time-bound plan. • Amended conversion cut-off date of 2007
  • 13. Challenges• Companies not making credible progress with RSPO: • No conversion of HCVF after 2004 • No burning • No social conflict re FPIC and rights to area • Approach to peat where >1m depth and 150 ha in area.• Different stakeholders – eg smallholders• Supply chain• “RSPO is not perfect”• Climate change• Asset management
  • 14. More challenges Source: GreenpeaceSource: Greenpeace Source: REM
  • 15. Looking forward• Recognise and support the benefits of palm oil• Mitigate the negative impacts• Make sustainable palm oil the norm• Supply chain• Multi-stakeholder approach is complex but necessary• A sustainable future is good for business• Responsible investment can drive sustainable production• Quicker where more financial institutions involved