Or should that be "greenwashing", as critics have labelled a £35 million partnership between a leading bank, WWF and two other environmental charities?
More than half the world's population will face water shortages within 25 years. A global extinction crisis is looming, with at least 20,000 plant species under threat. Apocalyptic facts such as these may well have been part of what motivated banking giant HSBC to make one of the biggest-ever corporate donations to green causes.
The Investing in Nature partnership, launched in February, aims to restore major river habitats in three continents and save thousands of endangered species from extinction. In return for its money, HSBC wants WWF, Earthwatch and Botanic Gardens Conservation International (BGCI) to work more closely with it than charities have traditionally done with corporate donors.
There will be regular feedback on meeting targets, for instance, and
several thousand staff from the bank will volunteer for conservation projects with the charities.
And in return for the "halo effect" that the bank gets from linking its name to green causes, WWF has got HSBC to embark on an energy management programme to reduce its use of things such as energy, paper and travel throughout its network. The charity has also extracted a promise from the bank to review the indirect impacts of its lending decisions.WWF, with 53 offices in Asia, Africa, the US and Europe, is the largest charity player in the partnership and receives £12.7 million mainly for three massive conservation projects along the Yangtze river
in China, the Amazon in Brazil and the Rio Grande in the US. Earthwatch, an international charity that funds conservation research, secures £11.3 million for environmental research. BGCI picks up £8.1 million, mainly for protecting 20,000 endangered plants and public education programmes in five countries.As the five-year partnership matures, the programmes are expected to cross over. For example, HSBC staff returning home from volunteering on environmental research projects may embark on botanical projects in the UK in collaboration with BGCI."An organisation of our size has the ability to act as a catalyst for both large and small organisations to work together. We haven't had much cross fertilisation of (environmental agencies') work before," says
HSBC's Amanda Combes, who manages the partnership for the bank.Starting this month, progress will be monitored through a series of quarterly meetings between the partners at HSBC headquarters, backed up by daily email and telephone contact. The key people driving the deal are HSBC corporate responsibility managers Amanda Combes and Alistair
Riley; Peter Wyse Jackson, secretary-general of BGCI; Eve Carpenter, head of marketing at Earthwatch; and Nicky Bishop and Francis Sullivan,
WWF's head of corporate fundraising and head of programmes respectively.
Back in 2000, HSBC let environmental organisations know that it had
plans for a "major" environmental partnership. The deal took 20 months to negotiate, and Anita Neville, communications manager at WWF, admits
that the talks were not easy for WWF or HSBC. Eighteen months of "frank discussions" failed to get HSBC to agree to a policy on its Indonesian
investments - the bank has still not signed an industry protocol on ecological forestry set up by the Forest Stewardship Council. But WWF gained leverage through the fact that Bishop already knew HSBC chairman Sir John Bond and because WWF's global reach made it a very desirable
catch for a global bank.
Like many other lending institutions, HSBC is linked, through its
investments, to controversial and unsustainable industries. These
include Indonesian logging and palm oil companies, dam projects and
The bank helped fund the Three Gorges hydro-electric dam in China, which
disrupts the natural flow of the very river, the Yangtze, that the
Investing in Nature partnership aims to conserve. This has naturally led
to accusations that the deal is little more than a "greenwashing" to
make the bank appear more environmentally friendly to its stakeholders
than it actually is.
Because WWF is a campaigning organisation, getting into bed with such a
partner does pose a risk. There have been stories of rifts within the
organisation following a report by its sister organisation in
Switzerland which allegedly showed that HSBC has the heaviest
involvement in Indonesian logging and palm oil companies of any British
Campaigning organisations such as Amnesty and Greenpeace avoid corporate
and government donations because they want to protect their
It would appear that WWF has traded a degree of campaigning autonomy in
return for the £12.7 million. According to Combes, HSBC has sought
assurances that WWF will "not seek to campaign in a way that could
jeopardise HSBC's business practices". Such an arrangement has been
struck "without making our partners toothless", she says, but many green
campaigners would disagree.
However, the arrangement works both ways - the bank, too, now has to
consider whether any of its future business decisions could jeopardise
the reputation of its charity partners. As Combes says: "We didn't want
to get into a position where we could compromise each other."
Some WWF employees are sceptical about the partnership, admits Neville,
but she claims newspaper reports have exaggerated the extent of the
internal debate. "We have 3,500 people employed across the world. A
healthy level of debate is to be expected in an organisation of our size
but it is not the case that there were serious rows," she says.
Nevertheless, WWF is taking its reputation management seriously. A
communications officer is being appointed to deal solely with the
Investing in Nature partnership. The communications officer will be
backed up by an account manager and a programme officer, also focusing
exclusively on Investing in Nature.
Campaigners should not isolate themselves from businesses simply because
they may not like all sides of their work, argues WWF. In fact, the more
they want to change, the more reasons there are for engagement. "Any NGO
gains a lot from being engaged, rather than standing on one side. Being
involved in this kind of partnership will give us greater leverage in
their business and a better insight into how the financial services
world works," says Neville.
Exhibit A in WWF's defence would be an attempt by HSBC to help establish
a global benchmark for lenders to dam projects. Pressure groups want
businesses to sign up to the World Commission on Dams guidelines, drawn
up by the UN, which differentiate between sustainable and unsustainable
Unfortunately, these guidelines were not designed for use by financial
institutions as the basis for lending decisions, and this is the main
reason they have not been adopted, according to Combes. HSBC plans to
hold meetings later this year "to explore a language that could be
developed for use by lenders," she says.
Exhibit B in the "engagement" argument is that last year HSBC adjusted
its credit and lending guidelines to ensure that lenders consider
environmental impacts as well as economic ones when making business
decisions. Unfortunately, this change has not been substantial enough to
improve the company's score on a social and environmental survey
published by Morley Fund Management last month, where FTSE 100 companies
were ranked according to social and environmental criteria. HSBC was
ranked only a little way above BAE systems and British American Tobacco,
which the survey described as "fundamentally incompatible with
HSBC has committed to an energy management programme (focusing on things
such as lighting, heating, paper and business travel) for its branch
network in the UK and this is now being rolled out internationally.
However, the bank's critics are bound to argue that this will have less
impact than cleaning up its investments abroad could have.
Greenpeace has traditionally taken a different approach to donations,
and has a policy of not taking any cash from governments or
Its campaigns director, John Sauven, did not wish to comment on the
Investing in Nature partnership directly but says that most corporate
social responsibility relationships tend to work the wrong way
"Companies should first and foremost look at what they're doing as a
company," he says. "Charitable donations should be the icing on the
cake, not the cake itself."
But more than 2,000 HSBC employees, from junior staff to
vice-presidents, will volunteer for international conservation projects
during the next five years as part of the Investing in Nature deal. Once
they return, they are expected to initiate conservation projects at home
and become environmental champions.
Apart from the quarterly progress checks, WWF hopes that smaller
subgroups will be set up involving charity staff and those at HSBC
responsible for making lending decisions, says Francis Sullivan. If the
subgroups go ahead, they could prove extremely significant. "This will
be the first time anyone has got this close," he says. "Charities have
acted as consultants and advisers before, but this is different - this
is a partnership."
First and foremost, WWF wants to change HSBC's lending policies that
relate to fresh water - the focus of the Investing in Nature partnership
- but then it hopes to move on to power generation and forests. No
timeline or target has been established yet, but Sullivan believes that
WWF's track record and the high-profile nature of the partnership will
give it momentum.
"Lots of people will be watching the bank to see what it funds - it has
put itself in the spotlight," he says. "This partnership is a bold step
for both us and the bank because it has to be based on results."
HSBC'S RECORD IN SOCIAL RESPONSIBILITY
HSBC is one of the largest banking organisations in the world, with
7,000 offices in 81 countries. The bank doubled the amount it spent on
charitable causes between 1997 and 2001, when it donated £20.3
million, of which £7.3 million went to educational projects and
£2.6 million to the environment. The bank supports initiatives in
Asia, the Middle East, Europe, Latin and North America to reflect the
global nature of its business network.
HSBC offices in the UK and the US already measure their direct
environmental impacts including electricity, gas, oil and water use,
plus business travel and waste. A "green" travel policy for employees is
planned, and the monitoring is to be extended to its offices in Hong
Kong and Canada.
HSBC did not score highly in an index of social and environmental
sustainability published last month by Morley Fund Management. However,
it came joint first in the banking sector in the Dow Jones
Sustainability Index last year when it joined, and is a member of the
FTSE4Good index, which measures company performance in the areas of
environmental sustainability, stakeholder relations and support for
human rights. It is also part of the Index of Corporate Environmental
Engagement, which assesses more than 200 UK-based companies on the way
their policies affect the environment.
HSBC's new group-wide standard commits the bank to address the
environmental and social implications of its business decisions,
According to its corporate responsibility brochure, this means that the
"bank will err on the side of caution if we think the environmental
risks of a transaction outweigh the benefits. We will not automatically
disengage from specific industry sectors, but implementing the standard
may prompt changes to our client base over time".
WHERE WILL THE MONEY GO?
£12.7m - Conserving river habitats
The largest chunk of money, £12.7 million, will fund river-based
projects in China, Brazil, the US and UK, backed up by research and
lobbying of governments and industry. The Brazilian and Chinese projects
will kick off later this year. In Brazil, WWF will deliver a "Use and
abuse of water" campaign aimed at an urban population of two million and
set up a model for freshwater fisheries management that it hopes will be
replicated by government after the end of the five years.
HSBC's money enables WWF to expand its work along the 4,000 mile Yangtze
river in China from 1,100 to 100,000 hectares, an area the size of
Greater London. In China, WWF will restore wetland eco-systems and
assist in a government programme helping farmers diversify from rice to
£8.1m - Saving plants from extinction
Botanic Gardens Conservation International will receive a donation of
£8.1 million to help step up its plant conservation activities in
16 major botanic gardens in Argentina, Brazil, Indonesia, India and the
Middle East. Two and a half million people in more than 10 countries
will also be targeted by new public education programmes highlighting
the importance of plant conservation. A new web site will be created to
help inform 400,000 people about 2,000 botanic gardens.
£11.3m - Creating environmental champions
International environmental charity Earthwatch gets £11.3 million
for its research programmes and for training 200 scientists from
developing countries. In addition, 2,000 HSBC staff will volunteer on
projects ranging from the decline in dolphin populations in the
Mediterranean to tracking endangered jaguars in Brazil. The HSBC
volunteers will get an HSBC Employee Environmental Fellowship to set up
an environmental project when they return. Employee volunteering is
useful for companies as it helps develop leadership skills and builds
team loyalty. Some companies already operate employee volunteering
schemes through Earthwatch, but HSBC's initiative dwarfs existing