HSBC PRIVATE BANK: Helping HSBC’s Clients Green Their Businesses
HSBC Private Bank issued the following announcement on Feb. 19.
Climate change is at the top of the global agenda, and HSBC has a crucial role in supporting family businesses to make the transition to a low carbon environment.
Helping HSBC Clients Green Their Business
The impact of climate change is already hitting Asia hard, and as a result, many family businesses in the region are increasingly turning to HSBC for advice on greening their business operations.
At the heart of Asia’s wealth boom, HSBC Private Banking also recognises the looming financial impact that climate change has on the business community. Unchecked, climate change could shave off an estimated 11 per cent off Southeast Asia’s gross domestic product by the end of the century.1
“We need to and can help these families make their businesses more sustainable. A lot of them, through their family offices, are already deeply involved in sustainable investing. But more can be done to incorporate sustainability into their own business, which has been their source of wealth to begin with,” said Philip Kunz, Head of Global Private Banking, Southeast Asia at HSBC.
A 2018 study by HSBC found that only 24 per cent of businesses in the region have an ESG (environmental, social and governance) strategy, compared with 48 per cent of corporates globally. Asian companies, particularly those in Southeast Asia, are at risk of falling off multinational corporations’ supply chains if they do not address their ESG strategies.
Likewise, the drive to become sustainable is increasingly at the top of domestic agendas, and countries are stepping up their hard targets for green policies. Singapore, for example, has recently implemented a carbon tax to encourage companies to bring down emissions. It’s a conscious decision, an acknowledgement that habits and practices must change in order for us to thrive.
The transition to a low-carbon environment often begins with conversations about awareness and improvisation. As part of one the world’s largest financial institutions, HSBC Private Banking’s role in this transition is to connect clients to new ideas, opportunities and networks that support the sustainable ambitions of these family businesses.
A great example is working closely with HSBC’s commercial banking division to foster deeper client relationships, leveraging each other’s network and capabilities to better identify specific areas for improvement for business owners.
“Rather than telling them to exit their business, we help these families to continue pursuing their business, but in a far more sustainable way. And ultimately, helping them understand that while the path to sustainability may increase costs at the start, but these (costs) will turn into an investment that brings huge benefits in time to come,” Mr Kunz explained.
Aside to providing sustainability-related thought leadership and innovations with capital financing, HSBC also takes a hands-on approach to generate more awareness on climate change.
HSBC Private Banking’s Sustainability Leadership Programme is very much a part of this ethos. The programme provides a platform for the Next Generation of business leaders to explore their own understanding of climate change and sustainability. It sparks a new reality for them to apply sustainable practices to their own business and investment decisions.
“Often, these clients come back to us after the trip and say, ‘How do we kick-start this whole process? Can you give us more insights? Can you tell us what the others are doing?’ There is increasing client proactiveness,” said Mr Kunz.
The push for greater adoption of sustainable practices in Asia is in part boosted by a generational shift in mindset that HSBC sees in many families.
“The new generation today have greater access to information and education. Many of them are so much more aware of what is happening outside of Asia, and are increasingly socially and environmentally conscious. We see situations where these sons and daughters may not necessarily want to run the company the way their parents do,” said Mr Kunz.
“During this process, they find a common purpose which binds them more closely together. The Next Generation come away feeling empowered to make a positive impact with their inherited wealth through the family business.”
“It doesn't happen overnight, but judging from the encouragement and enthusiasm we've received, and how well our partners are responding to conversations, we know we’re moving in the right direction,” reflects Mr Kunz.
Original source: https://www.hsbcprivatebank.com/en/discover/news-room/2020/helping-hsbc-clients-green-business?pid=HBSG:EB:NA:GEN:XAW:ART:0220:002:GrBus2020