Student Finance Overview

According to its website, HSBC Group aims “to lend and invest responsibly, avoiding projects where the potential for social and environmental damage outweighs the economic benefits.” As such, the group “exercises caution” when providing financial services to the following sectors:

• Chemicals
• Defence equipment
• Energy
• Mining and metals
• Freshwater infrastructure
• Forest land and forest products

HSBC Group also monitors its customers’ compliance levels and the scale of potential impacts. It has outlined detailed sustainability policies and utilizes the Equator Principles as a starting point for assessing whether to do business with the above sectors. The group states that “policies apply to all lending and other forms of financial assistance, primary debt and equity markets activities, project finance and advisory work.”

According to its Chemicals Policy, HSBC will not provide financial assistance to companies involved in: 1) the production of chemical weapons or 2) the manufacture, storage and transportation of persistent organic pollutants as well as certain hazardous pesticides and industrial chemicals.

HSBC’s Weapons Policy states the group does not provide financial services to customers that manufacture or sell anti-personnel mines or cluster bombs nor does it provide financial assistance to customers who solely or primarily manufacture or sell other weapons. 

The group’s Energy Policy covers coal-fired power, oil sands and nuclear energy industries. Specifically, HSBC will not lend to most polluting coal-fired power plants and has set a level of carbon intensity beyond which it will not finance new coal fired power plants or expansions. 

According to its Forest Lands and Forest Products Sector Policy, HSBC will not provide financial services which directly support illegal logging, operations in UNESCO World Heritage Sites or operations in wetlands on the Ramsar List.

HSBC has also taken the Equator Principles a step further by using the framework, where it deems appropriate, to assess export credit loans and corporate loans where proceeds are known to be designated for a project. The bank is developing more detailed guidelines for extending the Equator Principles framework across export credit loans.  The reporting category 'Loans by type of facility' has been replaced with a new category, 'Loans according to scope of Equator principles' in order to distinguish between project finance loans, to which HSBC formally applies the Equator Principles, and export credit loans to which HSBC voluntarily extends application of the Principles. 

HSBC has specialised teams to respond to both central and regional lending needs and targets. Transactions are initially assessed against the requirements of the Equator Principles by its Project and Export Finance teams. The proposals are then submitted for review and approval by the credit risk teams. Regular reports on the management of sustainability risk are prepared for senior management, including quarterly reports for the Risk Management Meeting of the Group Management Board.

HSBC Group also monitors its customers’ compliance levels and the scale of potential impacts on an annual basis.

HSBC provides the following examples of its ethical lending policy in action in its 2012 Sustainability Report:

• In 2012, the Group declined two potential transactions which would have adversely affected World Heritage Sites
• HSBC was asked to provide financial support to a building project along the Mexican coast. After utilizing the sustainability risk framework, the Group discovered that it was adversely affecting protected mangrove swamps, and was therefore noncompliant with its policies. HSBC declined to be associated with the project.

HSBC’s sustainable risk policies “apply to all lending and other forms of financial assistance, primary debt and equity markets activities, project finance and advisory work.”

In 2012, HSBC signed up to the UN’s Principles for Sustainable Insurance, a global sustainability framework and initiative of the United Nations Environmental Programme Finance Initiative. Its aim is. Its aim is to help insurance companies manage their environmental, social and governance (ESG) challenges. The principles ensure that signatories embed ESG in decision-making and work together with clients, partners and governments to raise awareness of ESG issues. See page 3.

HSBC offers the following products aimed at the financially excluded:

• Basic Bank Account
• HSBC’s ‘YourMoneyCounts’ is a free financial education project, that includes brochures and a website for customers
• HSBC retains frontline teams across Europe who deal specifically with customers experiencing financial difficulty.

No evidence found that HSBC UK or HSBC Group provides direct financial support to or engages in partnerships with Credit Unions and CDFIs (Community Development Finance Institutions).

HSBC provides the following for its customers with disabilities:

• Textphone to textphone service
• Statements in Braille, audio and large print
• On request, items of literature in preferred format
• Cheque, pay-in slip and plastic card templates
• Hearing loops in branches
• Sign language interpreter, speech to text translation for lipspeaker services
• Calls via the Text Relay service
• Chip and signature cards
• Larger Secure Key for accessing internet banking

HSBC offers parking for disabled drivers as well as access for disabled customers at many branches. Branches in areas with a high local ethnic population have members of staff who can deal with customers in their own language. Customers can contact HSBC direct to find out which branches have disabled access.

HSBC works with a number of large microfinance organisations to support their funding and development programmes, and also works directly with microfinance providers in a number of countries.

No evidence found that the bank invests in or lends at lower rates to financially excluded communities.