Meeting Expectations of RSPO Members & Stakeholders

Meeting Expectations of RSPO Members & Stakeholders 4th Roundtable Meeting (RT4)

by Simon Harris Chief Credit Officer HSBC Bank Malaysia Berhad

Overview

• HSBC Bank Malaysia is part the HSBC Group, which has around 9,500 offices in 76 countries and territories • A strong presence in Malaysia having been here for 122 years • First branch was established in Penang in 1884, with privileges to issue currency notes for the British Straits Settlement • It is precisely because of our global presence that we need to be accountable for who we are and what we do

1 RSPO Principles

• HSBC Bank Malaysia is an Executive Board member of RSPO • In October 2005, RSPO adopted 8 Principles and 39 Criteria for sustainable palm oil production • This is in line with addressing the rising consumer needs for sustainable palm oil production • Although a financial institution, HSBC has adapted these principles and criteria into its Corporate Social Responsibility initiatives • How do we do this?

What CSR Means to HSBC

“CSR is to address the expectations of our customers, shareholders, employees and other stakeholders by managing our business responsibly and sensitively for long-term success”

2 CSR at HSBC

Results of 2005 AccountAbility Rating ® (1) BP (2) Royal Dutch Shell Group (3) Vodafone (4) HSBC Holdings (up 41 places) (5) Carrefour

HSBC’s Strategic Objective

“To make HSBC one of the leading brands for customer experience and corporate social responsibility… To grow our revenues through a world-class, ethical sales and marketing culture”

… we integrate CSR as part of our core values

3 HSBC’s Approach to Sustainable Financing

• HSBC as a Group has adopted international codes of conduct such as: • Equator Principles • Global Sullivan Principles • UN Global Compact • Developed own internal codes of conduct, such as our Sector Guidelines: (a) Forest Land and Forest Products Sector Guideline (May 2004) (b) Freshwater Infrastructure Guideline (May 2005) (c) Chemicals Industry Sector Guideline (August 2005) (d) Energy Sector Risk Policy (June 2006) • Group Sustainable Development • This unit was established in 2005 to identify business develop opportunities and work with customer groups

• Equator Principles • Adopted the Equator Principles in September 2003 • A key part of a our wide approach to managing the sustainability of our lending • The Principles were revised in July 2006 to reflect the experience and best practices of the 40 financial institutions around the world, including HSBC’s input

“The Equator Principles are a cornerstone of HSBC’s approach to how we finance Projects and contribute to sustainable development” Jon Williams, HSBC’s Head of Group Sustainable Development

4 The Outcome

• Carbon Neutrality • We became the 1st FTSE 100 company to become carbon neutral in October 2005, 3 months ahead of its targeted timeline • The Bank offset its Group-wide emissions by buying 170,000 tonnes of carbon offset credit from offset projects in New Zealand, Australia, Germany and India • Sustainable Bank of the Year • HSBC was named overall winner in the inaugural Financial Times (FT) Sustainable Banking Awards in June this year • In recognition of our leadership in integrating social, environmental and business objectives in our operations • Best Corporate Governance • HSBC Holdings was awarded Best Corporate Governance by IR Magazine UK Awards both in 2005 and 2006

The Outcome

• Highest Overall Average Score for Banking Sector’s Environmental and Social Policies • According to a WWF-UK and BankTrack* study, HSBC was among the top two banks that scored the highest overall average score for the Banking Sector’s Environmental and Social Policies • The study took into account sectors such as: Forests, Agriculture, Dams, Chemicals, Human Rights, Indigenous People, Labour, and more

* BankTrack is a global coalition of NGOs including WWF-UK, Friends of the Earth, the Rainforest Action Network, and the Berne Declaration.

5 Conclusion

• CSR remains a complex subject but one that needs to be addressed • The pressures on us to demonstrate our commitment to see it continued remain the same • HSBC has embedded the RSPO Principles & Criteria in its own CSR initiatives to ensure and enhance sustainable financing • For HSBC, CSR does make good business sense

Thank You