Case Studies

Everyday use of electricity and fossil fuels (such as natural gas and petrol) results in the release of carbon dioxide – the main greenhouse gas – into the atmosphere (CO₂ emissions). Greenhouse gases trap heat from the sun, causing global temperature rise which in turn alters the world's climate patterns. To help counter these changes, governments, businesses, and individuals can become 'carbon neutral' by reducing net carbon emissions to zero.

In December 2005, HSBC became the world's first major bank to become carbon neutral. To meet this goal, a Carbon Management Plan was put in place which consisted of three parts:

• To manage and reduce its direct emissions;
• To reduce the carbon intensity of the electricity it uses by buying from renewable sources where feasible;
• To offset the remaining carbon dioxide by buying emission reductions from green projects.

HSBC estimated its carbon dioxide emissions for the last three months of 2005 would be around 170,000 tonnes. To compensate for these emissions, HSBC bought 170,000 tonnes of carbon offset credit from projects in New Zealand, Australia, India and Germany at a total cost of US$750,000, or US$4.43 per tonne of carbon offset. Details of the projects are shown below.

Te Apiti Wind Farm – North Island, New Zealand

Windpower is one of the most viable, and increasingly cost effective, forms of renewable energy. HSBC has invested in several small scale wind turbines for individual buildings and is looking into the viability of expanding this to more buildings around the world. However, it is much more efficient to capture wind energy on a larger scale in regions that have steady supplies of wind. One such wind farm that HSBC has already begun to work with is the Te Apiti Wind Farm, North Island, New Zealand. The Te Apiti project has 55 turbines which generate enough electricity to power 45,000 average-sized New Zealand homes per year. Te Apiti operates at around 45% of maximum capacity compared to a world wind farm average of only 30%. It is also one of the first projects to have been validated by the Gold Standard, one of the best regarded certification systems for carbon reduction. In 2005, HSBC purchased carbon offsets equivalent to 125,000 tonnes of carbon emissions – the same as taking 29,000 cars off the road.

Organic Waste Composting – Victoria, Australia

When organic waste is broken down in nature, methane can be a natural by-product. Methane is a natural part of the environmental balance, but it is also a very powerful greenhouse gas. This project composts organic wastes using aerobic methods which produce carbon dioxide instead of methane. Even though CO₂ is still produced, its global warming potential is much smaller than that of methane, reducing the negative environmental impact of organic breakdown. The Australian Greenhouse Friendly scheme issues the carbon reduction credits using rigorous standards, which also ensure against double counting. This process is verified by an independent party approved by the Australian Greenhouse Office. HSBC purchased 15,000 tonnes of carbon reduction from this project in 2005.

Sandbeiendorf Agricultural Methane Capture – Sandbeiendorf, Germany

This project also focuses on reducing the amount of methane released into the atmosphere but goes one step further. Fresh pig and cattle manure, when stored in open tanks or lagoons, produces harmful methane, adding to the amount of greenhouse gases in the atmosphere. The Sandbeiendorf project has created a biogas plant which can convert manure into heat and electricity, reducing methane emissions by 90%. In addition, the amount of CO₂ used by the project is reduced as it produces a large amount of its own heat and electricity. HSBC purchased 14,000 tonnes of carbon reduction in 2005 from this project – equivalent to taking 3,200 cars off the road.

Vensa Biotek Biomass Co-generation – Andhra Pradesh, India

This project in Andhra Pradesh turns biomass and agricultural waste into electricity for local industry, reducing greenhouse gas emissions by reducing the need to generate electricity from non-renewable sources. The electricity generated replaces the electricity that would otherwise be drawn from the state grid and any surplus electricity generated is fed back to the state. HSBC purchased 16,000 tonnes of carbon reduction from this project in 2005 – the same as would be produced by a full 747 return flight from New York to Hong Kong.

The Hatchubaru Geothermal Power Station uses steam twice before venting, doubling the amount of energy harnessed. © Harry Gruyaert/Magnum Photos