HSBC, one of the biggest banks in the world, has been accused of funding deforestation in Indonesia by environmental group Greenpeace International.
In a report titled “Dirty Bankers: How HSBC is Financing Forest Destruction for Palm Oil,” the environmental activist group accused HSBC of arranging loans and other credit facilities totaling $16.3 billion for six companies profiled in Greenpeace’s Dirty Bankers report, as well as nearly $2 billion in corporate bonds since 2012, despite the lender’s proclaimed sustainable policy.
The UK-headquartered bank is known as one of the largest lenders to the palm oil industry in the world.
Greenpeace’s report specifically highlights a list of HSBC clients that have been linked to unsustainable palm oil practices.
The report accuses HSBC and other beneficiaries of destroying tropical rainforests, land grabbing, operating with zero permits, employing child labor and peatland draining.
They have also been cited by the Indonesian government in cases of unrestrained fires and subject of numerous critical reports from social and environmental NGOs.
The NGO called out HSBC to disclose details of all financial services to palm oil companies, halting finance to existing customers and refusal of other services to potential customers that do not comply to the “No Deforestation, No Peat, No Exploitation” policy.
HSBC released a statement to comment on the Greenpeace report claiming to share Greenpeace’s concern over illegal Deforestation.
The bank said, it “has no interest in financing customers involved in: illegal operations; land clearance by burning; the conversion of high conservation value areas; harmful or exploitative child labor or forced labor; the violation of the rights of local communities, such as the principle of free prior and informed consent; and operations where there is significant social conflict.”
Regarding companies named by Greenpeace, HSBC said “customer confidentiality restricts us from commenting on specific companies.
“We are not aware of any current instances where customers are alleged to be operating outside our policy and where we have not taken, are not taking, appropriate action,” the bank added.
Looking specifically at the palm oil sector, HSBC said it “believes that palm oil can bring many benefits to society, such as economic development and the alleviation of poverty. And we agree with Greenpeace that palm oil can also result in negative impacts if not managed legally and sustainably.”