Noble Plantations, part of the HSBC-funded Noble Group, has allegedly been preparing to clear 18,000 hectares of forest in Papua, Indonesia for palm oil. In response, HSBC referred the Roundtable on Sustainable Palm Oil (RSPO) to supporting documentation and as a result, Noble has been advised to halt development while the investigation takes place. Earlier this year, HSBC tightened its ‘Sustainability Risk’ policy, which states, in part, that: ‘HSBC will not knowingly provide financial services to customers involved directly in or sourcing from suppliers involved in deforestation.’
Greenpeace has welcomed the HSBC investigation stating: ‘this is the first public evidence that HSBC is taking its new palm oil policy seriously.’ Greenpeace, together with the Environmental Investigation Agency (EIA), has put considerable pressure on HSBC – as well as other banks such ABN, Amro, ING and Rabobank – to raise the complaint with its mutual client, the Noble Group.
The banks affiliated with Noble Group have policies in place supposedly designed to prohibit the funding of companies destroying High Conservation Value forest. One such policy is a commitment to the RSPO, a sustainability body for over 3,000 members of the palm oil industry. Members such as HSBC rely on the RSPO to prevent them from funding deforestation. In 2017, the Guardian revealed past instances in which RSPO members, such as the IOI Group, failed to meet standards put in place to protect peat areas and forests, inferring that banks should be more active in ensuring their clients are complying with policy.
In January 2017, Greenpeace released a ‘Dirty Bankers’ report claiming HSBC had facilitated $16.3 billion of loans and credit to palm oil companies responsible for Indonesian forest destruction since 2012. Activists visited over 60 HSBC branches to inform its customers and in February 2017, 120,000 people in the UK signed a Greenpeace petition calling for HSBC to stop funding deforestation- 25% of signatories being HSBC customers.
In response to both Greenpeace’s actions, and the resulting public pressure to enforce a ‘no deforestation’ policy, on 20 February, HSBC released a ‘Revised Agricultural Commodities Policy: Palm Oil,’ consistent with ‘No Deforestation, No Peat, No Exploitation’ policies made common in the palm oil supply chain. In a statement, HSBC’s Chief Executive, Stuart Gulliver, assured the public that: ‘HSBC agrees with Greenpeace and the thousands of people who have contacted us… that rainforests need to be safeguarded.’
As one of the largest financiers of the palm oil industry, HSBC has been commended for holding the Noble Group to account in what has been called an unprecedented move for a major bank. The investigation is indicative of a shift towards the ‘moralisation of the market,’ in which ethical consumer preferences are driving changes in market conduct. Jamie Woolley, a spokesperson for Greenpeace commented: ‘HSBC’s decision to do the right thing and trigger an investigation into its own client could save thousands of hectares of pristine rainforests. If other banks are serious about stopping the destruction of rainforests for palm oil, they need to follow suit and take responsibility for their clients’ behaviour.’