HSBC, a British multinational bank headquartered in London, has released a new “no deforestation” policy. This announcement came after Greenpeace published a report titled “Dirty Bankers – How HSBC is Financing Forest Destruction for Palm Oil”. The report accused HSBC of directing more than 16 billion dollars in financing for six firms since 2012 that have illegally cleared forests in Indonesia in order to plant oil palm. When word spread of this investigation, which linked the bank to destructive plantation companies, thousands of people, including HSBC customers, joined the campaign aimed at changing the bank’s policies.
HSBC responded by revising its Agricultural Commodities Policy to include “No Deforestation, No Peat and No Exploitation” (NDPE) commitments in its financing of palm oil firms. The new policy will require HSBC customers to commit to protecting natural forest and peatland. The bank will also provide independent verification of their own NDPE commitments by Dec. 31, 2018. The commitments include refiners, traders, and growers. HSBC customers will also be required to agree that the bank may disclose information showing that it provides financial services to them.
The new policy for HSBC may prove to be crucial for Indonesia, where the rate of deforestation has dramatically increased as land is cleared to produce palm oil. Greenpeace plans to continue to its campaign by investigating other banks that may be funding destructive palm oil companies. Hopefully other major banks will react to the new environmental policy of HSBC, the 6th largest bank in the world, by looking into their own policies and supporting the conservation of rainforests.
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