Carbon neutrality
In 2005, HSBC was the first FTSE 100 company to become carbon neutral. Since then, the bank has helped maintain its carbon neutral status by:
- managing energy performance in buildings
- providing alternatives to business travel
- sourcing renewable energy, wherever possible
Although strides have been made to reduce the amount of carbon dioxide HSBC is accountable for, the bank must purchase carbon credits to remain carbon neutral. To achieve this, HSBC buys its carbon credits through the United Nation's Clean Development Mechanism (CDM).
HSBC purchases high quality Voluntary Emissions Reductions (VERs) on the international carbon market. Each VER represents one tonne of carbon dioxide that has either been avoided by an organisation through improving its energy efficiency or generated by an organisation developing renewable energy capacity.
In 2010, HSBC was responsible for 1,017,000 tonnes of carbon dioxide (CO2) in total, including energy use and emissions from business travel. HSBC currently collects environmental data for 95 per cent of its operations. This figure has been scaled up to represent 100 per cent of the organisation and to account for uncertainty factors in the monitoring and reporting process.
HSBC has set aside the CO2 emissions resulting from the consumption of electricity by HSBC's US and Canadian operations, by purchasing Renewable Energy Certificates (RECs) in units of megawatt hours in the US. The table below shows how this has been achieved.
| MWh | Carbon dioxide* | |
|---|---|---|
| Electricity consumed: | ||
| US | 244,693 | 111,451 |
| Canada | 44,455 | 8,180 |
| Total | 289,148 | 119,631 |
| RECs purchased in the US | 276,517 | 120,000 |
* MWh has been converted using approved conversion rates.
HSBC's remaining 897,000 tonnes of CO2 have been offset by purchasing VERs. HSBC takes a number of steps to ensure the credibility of the carbon credits it purchases. In addition to the UN's Clean Development Mechanism, HSBC undertakes its own checks on all potential offset projects. The bank undertakes due diligence to make sure that projects do not cause negative impacts on the local community and the environment. HSBC also checks that projects comply with bank's sustainability risk policies that are applied to its lending portfolio.
In 2010, HSBC bought VERs from projects located in China and India:
- renewable wind projects
- small scale hydro projects
- an industrial energy efficiency project
All of the projects were:
- approved by the UN's Clean Development Mechanism
- verified by registered auditors to the Voluntary Carbon Standard
registered in HSBC's Voluntary Carbon Standard registry account, operated by Markit
PricewaterhouseCoopers LLP ('PwC') has provided independent assurance covering HSBC's carbon emissions and offsets resulting in carbon neutrality. The PwC assurance report is on page 23 of our Sustainability Report 2010.
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