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HSBC Takes Climate Change Research to the Bank

Tree (FS.USDA.gov)

(FS.USDA.gov)

The international financial company HSBC, headquartered in London, has become a champion of climate change, and says its business benefits as a result. Part of HSBC’s involvement includes committing its staff as volunteers in large-scale climate research projects, a story told yesterday at the annual meeting of the American Association for the Advancement of Science (AAAS) in Washington, D.C.

HSBC is a global financial player, operating in some 8,000 offices in 87 countries. In 2009 — not the best year for global banking — the company reported profits of $7.1 billion, while managing assets totaling $2.36 trillion (2010 financials will be announced at the end of February).

In 2007, HSBC started its Climate Partnership program, which includes hands-on partnerships with several leading environmental organizations: The Climate Group, Earthwatch Institute, Smithsonian Tropical Research Institute, and World Wildlife Fund. At the AAAS meeting, Dan Bebber of Earthwatch in Oxford, U.K. and Jess Parker of the Smithsonian’s research center in Edgewater, Maryland reported on the research assisted by HSBC’s Climate Champions, as they are called. HSBC’s staff volunteer to collect data at five regional centers on forest conditions, with the data collected by Earthwatch in a continuing study of carbon dynamics.

The aim of Earthwatch’s research, with HSBC help, is to quantify how human disturbances, such as logging and climate change, interact to affect forest diversity as well as carbon capture and storage. Parker reported on findings from a dataset of tree biomass collected over the past 23 years from 55 temperate forest plots with known land-use histories and stand ages ranging from 5 to 250 years. He found that recent biomass accumulation greatly exceeds expected levels caused by natural recovery. Long records of local weather and on-site atmospheric CO2 measurements show increases consistent with globally observed climate-change patterns.

By the end of the Climate Partnership program in 2012, 2,200 HSBC employees will contribute nearly 100,000 hours of data collection across all five centers. And what does HSBC get out of all this? William Thomas, a transplanted American technology executive in HSBC’s London headquarters, told the AAAS participants how the Climate Champions program reflects the company’s larger sustainability perspective, weaving in his personal story of conversion from climate change skeptic to champion.

HSBC, says Thomas, defines sustainability as conducting business in a way that will enable the company to continue doing business for another 150 years. The Climate Champions program enables HSBC staff to adopt that mindset, which gets reflected in bottom-line enhancing practices such as waste reduction and environmental marketing. But the company also builds sustainability principles into its financial business practices, including criteria for loans.

Rather than feel-good treehuggerism, HSBC has instead focused on what it believes is a significant business opportunity. The company reports its research shows that the climate business sector –- products and services linked to addressing climate change –- now generates annual revenues of more than $500 billion, which already exceeds the global aerospace and defense industries combined. That sector is expected to grow to $2 trillion dollars by 2020.

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