Feb 20, 2017

HSBC tightens lending to palm oil industry

HSBC has tightened its standards on lending to the palm oil industry, pledging that it would cut ties with companies linked to the destruction of rainforests in key production areas. The new standard, which aligns the UK-based bank with the "No deforestation, no peat, no exploitation" policy adopted by leading palm oil growers, traders and buyers, follows a recent report by Greenpeace which highlighted HSBC's links with palm oil companies alleged to have been behind deforestation. Last year, Moody's announced that it was reviewing the credit rating of IOI, a leading palm oil producer and trader, for a possible downgrade after large consumer groups suspended trading with the group, following the suspension of the palm oil company's sustainability certificates. The bank revised its policies on palm oil financing in 2014. It said it subsequently dropped 104 clients that were not respecting its rules, which are based on the principles of the Roundtable on Sustainable Palm Oil, an industry standards body.

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