HSBC Goes Carbon Neutral Three Months Early

HSBC Goes Carbon Neutral Three Months Early

HSBC has become the first major bank to reduce its carbon dioxide (CO2) emissions to zero by reducing energy use, buying green electricity, and then offsetting the remaining CO2 emissions by investing in carbon projects. The bank made the announcement on the final day of a recently concluded U.K. government-sponsored conference, Climate Change: The Business Forecast.

In 2004 HSBC made public its intention to go carbon neutral by January 2006 and has achieved its objective three months ahead of schedule.

Based on last year's data, HSBC has estimated the company's carbon dioxide emissions for the last three months of 2005 will be around 170,000 metric tons and so in order to compensate for these emissions, at least 170,000 tons of carbon credits need to be bought. Through a competitive tender process the bank has received details of around 100 offset projects from dozens of countries.

To ensure these credits are credible, genuinely incremental and cost effective, HSBC has enlisted the help of environmental partners The Climate Group and ICF Consulting. Following exhaustive investigation, a final portfolio of projects has been assembled with four carbon offset suppliers. These projects are located in New Zealand, Australia, India, and Germany, at a total cost of $750,000, or $4.43 per ton.

Speaking at the conference, Sir John Bond, HSBC group chairman, said: "HSBC is constantly looking at ways to increase energy efficiency and reduce its output of environmentally damaging waste. As part of this plan the bank has pledged to cut its net emissions to zero and will embark on a carbon neutral 'dry run' for the last quarter of 2005, to ensure it is fully prepared ahead of the previously announced January 2006 deadline."

Dr. Steve Howard, CEO of The Climate Group commented, "This is the first time that a major bank has been able to reduce their new carbon dioxide emissions to zero. We congratulate HSBC for reducing its energy use, announcing targets for the future and now setting a trend of carbon neutrality for other major companies to follow."

HSBC’s commitment to carbon neutrality is part of a package of environmental measures announced in December 2004 by the bank to help tackle climate change. In July 2005 HSBC also announced company-wide, three-year environmental targets to reduce energy and water use, waste production and cut carbon dioxide emissions by 5%.

Earlier this year HSBC was ranked by the Carbon Disclosure Project among the top 60 companies globally in terms of climate leadership.