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2 HSBCHoldingsplcSustainabilityReport2011 3HSBCHoldingsplcSustainabilityReport2011

DouglasFlintGroupChairman

Creating asustainablefnancialsystem

HSBCwasounded147 yearsagoto nancecompaniestradingonthe Chinacoast.Today,justaswe didthen,weseektoacilitateeconomic growth,asitis throughsuchgrowththatbusinessesfourish andindividualsulltheaspirationstheyhaveor themselvesandthoseclose tothem.Weaim todothis inawaywhich issustainable,recognisingthatwehave responsibilitiesnotonlytowardsourcustomers,employeesand shareholdersbutalsoto thecountriesandcommunitiesin whichweoperate,and thoseresponsibilitiesgoarwider thansimplybeing protable.

Thisisa decisivemomentin thehistoryo ourindustry.Nearlyeveryaspecto thenancialservicessectoris beingchallengedandredened;accepted wisdomisbeingoverturned.Collectively,thebankingsector stillacespublicangerandreorm isnecessarynotonly toaddressstructuralshortcomings,buttorestore publictrust.We welcomethestepsbeingtakenby governmentsandregulatorsto improvethestabilityandresilience oourindustry. Wecontinuetocommittimeand considerableresourcestoworking withpolicy-makersonregulatoryreorms.We startromtheassumptionthatreormsmust deliverasustainablebusinessmodel,onewhich isableto attractexternaleconomiccapital,sothatthe nancialsystemcancontributeas ullyasitshouldtoeconomicprosperityand tosupportinggrowth andjobs.

Thesizeo ourbusinessmeansthat managingourenvironmentalimpactand askingoursuppliersandcus tomers todothesame isakeypartobeingsustainable.In2011,we startedworkonachieving 10environmentalgoalsby2020, bywhichtime wewantto havereducedourannual peremployeecarbon emissionsbyonetonne,rom3.5 to2.5tonnes.We alsoimplementedourupdatedenergysector policy,oneothe rstinthe industrytoapplycriteriacovering customersoperatinginthe coal-redpower,oilsandsand nuclearpowerindustries.

In2011,we prioritisedbuildinga values-basedbusiness,helpingcolleaguesto managechangeandempowering themtoactwith courageousintegrityindelivering orourcustomersandshareholders.We continuedtodevelop atrulymeritocraticculturebecause,asinternational competitionorthebesttalent intensies,weneed toensurethat HSBCismakingthemost otheskills andabilitieso ourpeopleandencouragingthemto reachtheirull potential.

Inaddition,wecontinued toinvestin thelong-termuture othecommunitiesin whichweoperate;support whichwillhaveaneconomicand socialimpactoryears tocome.In2011,HSBCdonated US$96millionthrough ourcommunityinvestmentprogrammes.Ourpriorities inthisarea arehelpingyoungpeople torealisetheir ambitionsandprotectingtheenvironment. Bothareessentialoundationsorsocio-economicdevelopment.

Itwaswithimmense pridethatI joinedthecelebrations tomarktheconclusiono theHSBCClimate Partnershipin2011.Thisgroundbreaking,ve-year,US$100 millionenvironmentalprogrammewith TheClimateGroup,EarthwatchInstitute,SmithsonianTropicalResearchInstituteandWWFhas helped32million peopleaccesscleanerwater;protectedthreemillion hectaresoorestland; andthroughdevelopinglowcarbon technology,ishelping20 otheworldsbiggestcitiesto cutcarbonemissionsmore quickly.ThePartnershipalsodelivered thelargestever orestresearchproject.

WithinHSBCitsel,we nowhavea globalcommunityo over2,000employees,calledClimate Champions.EachChampionspendstime outothe ocelearningabout theactionsneededto makeapositiveimpact onourenvironment;knowledgewhichis thensharedwith

Itwas withimmensepridethatI joinedthecelebrationstomarktheconclusionotheHSBCClimatePartnershipin2011.

colleagues,riendsandamily.The Partnershiphasalsobenetedroma urther63,000dayso volunteeringromHSBCcolleagues.Thisis aremarkablelegacywhichhas onlybeenachievedwithenorm ouscommitmentrom ourpartnersandcolleagues.

Lookingahead

Asabank,we lookathow thepatternso projectedgrowth,tradeandconsumptionwill contributetoour bottomline.Butwealsorecognisethat, itheworld continuestoovershootitsresourcecapacity,thereis therisko localised,andeventuallyglobal,constraintsoneconomic activity.Runningasustainableorganisationmeansbalancingthe needsocustomerstoday(helpingadvancedeconomies recoverromthedownturnand aster-growingmarketsstrengthenanddeepentheireconomies) withtheresponsibilitywe havetouturegenerations.

Whenreconcilingthese confictingdemands,Ithink ohowpreviousChairmeno HSBCtookthe decisionstheybelievedwererightor thelongterm, evenithey werenotimmediatecontributorsinthe shortterm.I amproudo thislegacyandamdetermined thatHSBCwillbe assuccessulandsustainableinthenext 147years,asit hasbeenor thepast147.

DouglasFlintGroupChairman

May2012

HSBCsroleinthe economy,environmentandsocietyin 2011

Whiletheindustry asawholelooks toreorm,individualbankshavetheirown storytotell abouttheirrole intheeconomyandsocietyat large.AsChairmano HSBC,Ihavealmost300,000colleaguesin over80countries aroundtheworld.Wehavean impactonthe livesomillions opeoplethroughourinteraction withcustomers,businesses,governments,otherstakeholdersando urcommunities.Thisgivesusa broadperspectiveandinorms oursenseoresponsibilityaboutourrole.

In2011,or example,wepaidUS$8 billionintaxes aroundtheworld.We increasedourgloballending tosmallandmedium-sizedenterprises(SMEs)by10 percent,helpingthesebusinessestothrive andeconomiesto prosper.Lendingonresidential mortgagesalsoincreasedby US$10.2billion,takingthetotal toUS$279billion atyear-end,helpinghundredsothousandso peoplerealisetheir ambitionoowningtheirown home.Weprovided amortgageto oneinsevenrst-timebuyersin theUKand increasedourshareothemortgagemarketinHongKongto24percent. Wea lsocontinuedtoprovide supporttocustomerswho areeelingtheeectso diculteconomicconditions.For instance,ourMoneyManagementTeamin theUK,whichoers adviceandguidance,hashelped over70,000customerssince itwasestablishedin2009.

Atthesame timeasproviding immediatesupportor thosewhoneeditnow, wecontinuetorefec tonourlongertermimpactonthe environmentandsociety.

...wehave responsibilitiesnotonlytowards ourcustomers,employeesand shareholdersbutalsotothecountriesandcommunitiesinwhichweoperate...

Group Chairmans Introduction

ForHSBC,sustainability meansbeinginbusinessorthelongtermandmeetingtheneedsothepresentgeneration,withoutpreventing uturegenerationsromsatisying theirs.

Meeting thechallenges o todayand anticipatingthe opportunitieso tomorrow

Attracting,retaining anddeveloping thebesttalentin aninternationalmarketplace

Thisreportsets outHSBCsapproachto sustainability:howweincorporatesustainabilityinto ourbusinessandwhatwedid in2011.It sitsalongsidethe AnnualReportandAccounts2011 andAnnualReview2011 ,inormingshareholdersandotherstakeholders aboutourbusiness.Moredetailabout oursustainabilityactivitiescanbe oundatwww.hsbc.com/sustainability.

Ourapproachto sustainabilitytakesintoaccountthe viewsoHSBCsstakeholdersandour ownunderstandingo theGroupsimpactonwider society.Asafnancialservicescompany,theproductswe provideintermediatein theeconomy,bridgingthegap betweenthosewhowant tosave,thosewhowantto borrowandwidersociety.We alsoprovidethehardwareneeded tomovemoney aroundamoderneconomy,suchasATMs,creditcardsand electronictransers.

Howweserveour customers,valueouremployees andinvestinour communitieshasasocial impact;thetaxesanddutieswepayin theregionswe operateinand thedividendswepayto shareholders(otenpensionunds), haveaneconomicimpact;andthe businesseswebankand ourownoperationshaveanenvironmental impact.

Forthesereasons,we believeagood bankmustbe runwithalong-termview.It mustbeconsistentlyproftable, butnotbesolelyconcernedwith makingaproft. Onlythendo wehaveasustainablebusiness,able toattractand retainthecapitalweneedrom ourshareholders,tocontinue tooperate.

Wehaveidentifed sixareaswhich,takentogether, makeourbusinesssustainable.

Understandingthatthecompanies wefnance have animpacton peopleand theenvironment

Managing ourenvironmentalootprintandreducing costs

Serving ourcustomers withthe productsandservices theyneed and want

Investing inindividuals tocreatesustainablecommunities

Stra

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Commu

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Sustain

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SustainingHSBCforthelongterm

6 7HSBCHoldingsplcSustainabilityReport2011HSBCHoldingsplcSustainabilityReport2011

Chapter1.A SustainableStrategy (continued)

EngagingourstakeholdersListeningtoour stakeholdershelpsormour approachtosustainability.Thissectiongivesabrie overviewoourstakeholderengagement.

Employees

HSBCsGlobalPeopleSurveyhelps ustomeasure employeeengagementinorder tounderstandwhatactions areneededtoincreasebusinessperormance andtobenchmarkourprogressbothinternallyand externally.In2011,81 percentoouremployees respondedandemployee engagementroseonepercentagepointto69percent. Wereportthema infndingsothe surveyonpage22.

Customers

Weserve89 millioncustomersin 85countriesand territories.Weengagewith ourcustomersthrough awidevarietyochannels,romwrittenand electroniccommunications,toclientevents,customerpanels andone-to-onemeetings.Customereedbackistracked acrossourbusinessesanddrivesourbusinessdevelopment.

Shareholders

Withlistingson theLondon,Hong Kong,NewYork,ParisandBermudastockexchanges,sharesin HSBCHoldingsplcareheldbyover 220,000shareholders.In2011, HSBCranaprogrammeo906 seniorexecutivemeetingswithrepresentativesoinstitutionalshareholdersin 27countriesandterritories.Weheld alsomeetingswithover 30SustainableandResponsibleInvestmentinstitutionalinvestorsinLondon,Paris, Frankurt,BostonandNew York.

Communityrepresentativesandcharitypartners

Weworkwitha widevarietyo charitiesasparto ourCommunityInvestmentprogrammes.Through oureducationprogrammewepartner SOSChildrensVillages,JuniorAchievementandthe FoundationorEnvironmentalEducation.Forthelast fveyears,wehave beenworkingwithourleadingenvironmental organisationstheClimateGroup,EarthwatchInstitute,SmithsonianTropicalResearchInstituteandWWF --onthe HSBCClimatePartnership.

Suppliers

In2011,HSBCspent US$17.5billionwith approximately30,000suppliersglobally.We askalloour supplierstocomplywithacode oconductwhich setsHSBCsenvironmental,socialandethicalstandards oroursupplychain.Weareworking withourkey supplierstodevelop newproductsandservicesto deliveroursustainabilitygoals.

Non-governmentalorganisations(NGOs)

Weengagewith campaigngroupson mattersosharedinterest. We are proactive memberso anumber o multi-stakeholder orums, such as the Roundtable on SustainablePalm Oil, which bringstogether NGOs, businesses andfnancialinvestorsto agree standardso good practice orthe sector.

Governmentsandregulators

HSBCs Group Chairman, Group Chie Executive and othersenior executives engage with governments and regulatorsaround the globe on creating a sustainable fnancial system.We believe it is in the interests o governments, banks,investors and consumers to have a fnancial system thatencourages competitive, vibrant and stable markets,providing consumers with the protection they need,businesses with the capital they require, and taxpayers withreassurance about the long-term viability o the bankingsystem, without adding unnecessary business costs orrevenue risk. In 2011, our senior executives had meetingswith politicians, regulators and ofcials representingnational governments, the European Union and othersupranational authorities and we ormally responded tonumerous consultation papers issued by policy-makersaround the world.

ManagementandgovernanceUltimately,eachoour colleaguescontributestomakingHSBCmoresustainableby managingone,or more,othesixkeyareasidentifed, i.e.strategy,employees,customers,riskmanagement,sustainableoperationsand communityinvestment.

HSBChasaCorporate SustainabilitydepartmentwithinGroupHeadOfceand ineacho ourmajorregions andcountriesooperation.These teams shape the Groupsapproach to sustainable business opportunities and risksand community investment. Many other specially trainedcolleagues across HSBC are also responsible orimplementing our approach to sustainability; or example,in credit risk, purchasing, IT, and relationship managementteams. Other aspects o sustainability are ully embeddedin the business -- or example, risk and environmentalefciency -- and are managed as business as usual.Customer and employee relations are core unctions othe Group.

CorporateSustainabilityisrepresented ontheGroupManagementBoardthroughthe GroupManagingDirectorwhohasoversighto CorporateSustainabilityandHumanResources,reportingtothe GroupChieExecutive.

TheCorporateSustainabilityCommittee iscomposedonon-executiveDirectorsandnon-directormembers. In2011,thechairmanwasNarayanaMurthy,a non-executiveDirector(appointed28May2010) andthemembers wereVincentCheng,anexecutiveDirector (retired27May 2011)andLauraCha(appointed3 May2011),GerryDavis,Lord MayandDameMaryMarsh,whoare non-directormemberso theCommittee.TheCommittee heldourmeetings in2011.

SustainableeconomiccontributionByrunninga sustainablebusiness,HSBCisable tomakeavaluablecontributiontothe economybypayingdividends toourshareholders;salariesto ouremployees;paymentsto oursuppliers;andtaxrevenues togovernmentsin thecountriesandterritoriesin whichweoperate.In 2011,reportedpre-taxproftroseby 15percent toUS$21.9billion.

Sustainability

11HSBCHoldingsplcSustainabilityReport2011

Ourproductsand serviceshelpcustomersmeet theirneedsandambitionsin lie.This,in turn,hasabroader socialimpactbycreatingfnancialsecurityand contributingtothegenerationowealth.

Asabusiness,we alsorecognisethatwe havearesponsibilitytoassessthe environmentalandsocialimpactsthatourlending andinvestmentscanhave andto managetheseimpacts.Wealso haveaduty toensureour businessdoesnotlaunder theproceedso crime,orhelp undcriminalactivity.Finally,wemustunderstand,respect andmanageourdirectimpact ontheenvironment.

Inthischapter,we highlightsomeo thewayswedeliveredorourcustomers andthe widercommunity in2011.

1 0 H SB C Ho l di n gs p l cSustainabilityReport2011

Toattractincomeoverthelongterm,wemusthavetherightstrategyandproducts,so ourcustomerswill wanttocontinuedoingbusinesswithus.Ourcustomersplacetheirtrustinus,sowe mustmeettheir expectations.

Chapter2.A SustainableBusiness

Serving our Customers RetailBankingandWealthManagement

InHSBCsRetailBankingand WealthManagementbusiness,weaimto buildlongterm,sustainable,andmutuallyvaluablerelationshipswithourpersonalcustomers,usingourglobalscale tobuildcompellingpropositionstomeettheir needs,and

helpingthemtoachieve theirambitions.

PaulThurstonChieExecutive,RetailBanking andWealthManagement

OurRetailBanking andWealthManagement(RBWM)businesslooksaterthe bankingneedso individualcustomers.

Ourmajormarketsare theUK,the HongKongSAR, France,theUS,Mexico,Brazil andTurkey.In2011,we continuedtoevolveour productoeringto meettheday-to-daytransactionneedsoour customers.Weprovidedthe fnancetohelppeople meettheirlong-term ambitions,suchashomeownership,andwewidened accesstoservicesthrougheducation,targetingexcludedgroups andhelpingcustomersexperiencingfnancialdistress.Wealso recorddataoncustomercomplaintstotrack ourprogressin resolvingtheseproblems.

Helpingpeoplemeettheir long-termambitions

Weprovidethe fnancepeopleneed torealisetheirambitions,suchasowning theirownhome.

Brazil:Weareone othemain mortgageprovidersin Brazil.I n2011, newmortgagelendinggrewby85percenttoUS$1.022billion,romUS$554 millionin2010. Wealsoissuedaguidetoa l lourcus tomers inBrazi lonhowtomaketheirhome,and dailyroutine,more sustainable.

France:HSBCmadeUS$3billion omortgageundingavailable,anincreaseo11 percentrom thepreviousyear.

HongKongSAR: HSBChasbeenthe numberonemortgageservicesprovidersince2009, withnewmortgage marketsha reo24percentin2011, uprom19percentin2010.

Turkey:I n2011, wehelpedover7, 000peoplebuyanewhome,providingUS$511million inmortgagefnance.

USA:HSBCBankinvestedUS$256 millioninCommunityReinvestmentAct-eligibleinvestmentunds whichsupportinitiativesdesignedtorevitalise orstabiliselowto moderateincomeareas,orto provideaordablehousing andcommunityservicestopeople onlowto moderateincomes.

UK: Since2007,HSBChas increaseditstotalmortgagelendingtoUK homeownersbyover 75percent. Wecontinuedtosupport theUKhousing marketthroughout

2011,providinga mortgagetoone insevenfrst-timebuyersnationallyandlendinga totaloUS$21 billionoverall.Wearemakingurther undingavailabletosupport personalcustomerswhowantto owntheirown homes.In2012,wehavecommittedto provideUS$24billion inmortgageunding,includingUS$4.8billion orfrst-timebuyers,tohelpatotal o150,000customers.

Wideningaccessand targetinghelp

HongKongSAR: Todayalmostonein fvepeoplein HongKongisaged over60.In 2010,welaunchedour SmartSeniorswithHSBCProgramme,recruiting80 part-timepost-retirementstatopromote andmanageareaswithinbranchesdedicatedtoservingthe needsothe oldercustomer.In2011,werecruited anadditional20Smart Seniorsta,extendingthisserviceto over50per centoour branchnetwork.Wealsosupportedthe governmentsschemetodistributeUS$771toall adults,byundertakingoutreachactivitytoensureseniorcitizens registeredorthe scheme.

UK: Inresponseto theeconomicslowdown,in 2009weestablishedourUKMoney ManagementTeam,whichsupportscustomersbeorethey gointoarrears.Our speciallytrainedstaoer adviceonbudgeting,overdratmanagementandrestructuringo debt,helpingcustomers toavoidthestresso missedpayments.Theteam hashelpedover70,000people dealwiththeir fnancialdifcultiessinceitwassetup.

USA:Since2003,more thansixmillion consumershavevisitedHSBCsfnancialeducationsite,(www.yourmoneycounts.com).Consumerscanaccessinormationonhomeownership,budgeting, managingcredit,smallbusinessownershipand otherfnancialtopics.In 2011,YourMoneyCountshadmorethan 800,000visitors.

Global:HSBChasalsohelped morethan176,000 youngpeoplewithfnancialliteracy throughtheJunior Achievementscheme.Youcanreadmore aboutthisworkon page25.

Handlingcomplaints

Wehaveput inplaceprocessesand proceduresacrossourbusinessestoensurethat customercomplaintsarehandledproperly.

France:Whilethenumber ototalcomplaintsremainedstable,thenumber ocomplaintsreerred totheOmbudsmanincreasedby10 percent,ollowing a26percentdecreasein2010.

HongKongSAR: Customercomplaintvolumeswere downourpercent, whilecustomercommendationsincreased 146percentyear-on-yearin 2011.

85%increaseinnew mortgagelendinginBrazil

Iwouldlike peopletoviewHSBCasaresponsibleinstitutionwhichisawareoitsroleinthe community,istrustedbyits customers,isagoodandairemployer,and oersastable,attractiveandpositivereturntoitsshareholders.StuartGulliverGroupChieExecutive

US$21,872m

7.64.3

32.2

GlobalPrivateBanking

GlobalBankingandMarkets

RetailBankingandWealthManagement

Other

CommercialBanking

Contributiontoprofitbeforetax2011 (reportedbasis)%

19.6

36.3

Sustainabilitysee page 6

Group ChairmansIntroductionsee page 2

Serving ourCustomerssee page 10

Contents

1 Highlights o 2011

2 Group Chairmans Introduction

Chapter 1. A Sustainable Strategy

4 Our Strategy

5 Our Approach

6 Sustainability

Chapter 2. A Sustainable Business

10 Serving our Customers

15 Climate Business16 Sustainability Risk Management

19 Sustainable Operations

Chapter 3. A Sustainable Workorce

22 Valuing our Employees

Chapter 4. A Sustainable Future

24 Community Investment

27 Looking to 2050Preparing or the next wave by Nick Robins,Head o HSBC Climate Change Centre o Excellence

28 Conclusion o the HSBC Climate Partnership

Appendices

30 Key Facts

32 Assurance Report

Inside back cover: About this Report

Cover image

A Chinese ship in Brazils largest port, Santos, illustrates the

growing trade links between the two countries. China istoday Brazils largest trading partner, with HSBC nancing anincreasing share o that trade.

Photography: Matthew Mawson

Who we are and what we do

HSBC is one o the worlds largest banking and nancialservices organisations. With around 7,200 oces in bothestablished and aster-growing markets, we aim to be wherethe growth is, connecting customers to opportunities,enabling businesses to thrive and economies to prosperand, ultimately, helping people to ull their hopes andrealise their ambitions.

We serve around 89 million customers through our ourglobal businesses: Retail Banking and Wealth Management,

Commercial Banking, Global Banking and Markets andGlobal Private Banking. Our network covers 85 countries andterritories in Europe, the Asia-Pacic region, the Middle East,Arica, North America and Latin America. Our aim is to beacknowledged as the worlds leading international bank.

Listed on the London, Hong Kong, New York, Paris andBermuda stock exchanges, shares in HSBC Holdings plcare held by over 220,000 shareholders in 132 countriesand territories.


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1HSBC Holdings plc Sustainability Report 2011

HSBCs awards orsustainability 2011

Global Bank o the Year:The Bankermagazine

Number 1 nancial servicesbrand (value US$27.1b):Brand Finance

International Green Awardsor Best Green EmployeeEngagement (jointly withEarthwatch)

Rated AA in Environmental,Social and Governance (highestscore) among 638 Hong Kongand China listed companies onthe Hang Seng CorporateSustainability Index

Scored 95 in Carbon DisclosureLeadership Index, third highestnancial institution

Best Corporate SocialResponsibility Financial Institution

Award: China Banking Association

Number 7 greenest bank:Bloomberg Markets

Top ve sustainability ranking(nancial institutions) or HSBCin Latin America: Inter-AmericanDevelopment Bank

HSBC Climate Partnershipscontribution to climate changeresearch and cultural changes insociety: Ozires Silva Award orSustainable Entrepreneurship

Socially Responsible Companyaward or HSBC Mexico or

sixth consecutive year: CentroMexicano para la Filantropia(Mexican Centre or Philanthropy)

Highlights o 2011

63,250days volunteered byemployees through the HSBCClimate Partnership 2007-11

541,000children educated through FutureFirst over the last ve years

41,000corporate customers assessedor their potential impact onpeople and the environment

22%increase in lending to SMEs inaster-growing economies

US$96minvested in supportingour communities

29%reduction in waste sentto landll 2008-11


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2 HSBC Holdings plc Sustainability Report 2011

Douglas Flint Group Chairman

Creating asustainablefnancial

system

HSBC was ounded 147 years ago to nance companiestrading on the China coast. Today, just as we did then, weseek to acilitate economic growth, as it is through suchgrowth that businesses fourish and individuals ull theaspirations they have or themselves and those close tothem. We aim to do this in a way which is sustainable,

recognising that we have responsibilities not only towardsour customers, employees and shareholders but also to thecountries and communities in which we operate, and thoseresponsibilities go ar wider than simply being protable.

This is a decisive moment in the history o our industry.Nearly every aspect o the nancial services sector is beingchallenged and redened; accepted wisdom is beingoverturned. Collectively, the banking sector still aces publicanger and reorm is necessary not only to address structuralshortcomings, but to restore public trust. We welcome thesteps being taken by governments and regulators to improvethe stability and resilience o our industry. We continue tocommit time and considerable resources to working withpolicy-makers on regulatory reorms. We start rom the

assumption that reorms must deliver a sustainable businessmodel, one which is able to attract external economic capital,so that the nancial system can contribute as ully as it shouldto economic prosperity and to supporting growth and jobs.

HSBCs role in the economy, environmentand society in 2011

While the industry as a whole looks to reorm, individualbanks have their own story to tell about their role in theeconomy and society at large. As Chairman o HSBC, I havealmost 300,000 colleagues in over 80 countries around theworld. We have an impact on the lives o millions o peoplethrough our interaction with customers, businesses,governments, other stakeholders and our communities.This gives us a broad perspective and inorms our sense oresponsibility about our role.

In 2011, or example, we paid US$8 billion in taxes aroundthe world. We increased our global lending to small andmedium-sized enterprises (SMEs) by 10 per cent, helpingthese businesses to thrive and economies to prosper.Lending on residential mortgages also increased by US$10.2billion, taking the total to US$279 billion at year-end, helpinghundreds o thousands o people realise their ambition oowning their own home. We provided a mortgage to one inseven rst-time buyers in the UK and increased our share othe mortgage market in Hong Kong to 24 per cent. We alsocontinued to provide support to customers who are eelingthe eects o dicult economic conditions. For instance, ourMoney Management Team in the UK, which oers adviceand guidance, has helped over 70,000 customers since it

was established in 2009.At the same time as providing immediate support or thosewho need it now, we continue to refect on our longer termimpact on the environment and society.

...we have responsibilities notonly towards our customers,employees and shareholdersbut also to the countries and

communities in which weoperate...

Group Chairmans Introduction


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The size o our business means that managing ourenvironmental impact and asking our suppliers andcustomers to do the same is a key part o beingsustainable. In 2011, we started work on achieving 10environmental goals by 2020, by which time we want to havereduced our annual per employee carbon emissions by onetonne, rom 3.5 to 2.5 tonnes. We also implemented ourupdated energy sector policy, one o the rst in the industryto apply criteria covering customers operating in the coal-redpower, oil sands and nuclear power industries.

In 2011, we prioritised building a values-based business,

helping colleagues to manage change and empowering themto act with courageous integrity in delivering or ourcustomers and shareholders. We continued to develop a trulymeritocratic culture because, as international competition orthe best talent intensies, we need to ensure that HSBC ismaking the most o the skills and abilities o our people andencouraging them to reach their ull potential.

In addition, we continued to invest in the long-term uture othe communities in which we operate; support which willhave an economic and social impact or years to come. In2011, HSBC donated US$96 million through our communityinvestment programmes. Our priorities in this area arehelping young people to realise their ambitions andprotecting the environment. Both are essential oundationsor socio-economic development.

It was with immense pride that I joined the celebrations tomark the conclusion o the HSBC Climate Partnership in2011. This groundbreaking, ve-year, US$100 millionenvironmental programme with The Climate Group,Earthwatch Institute, Smithsonian Tropical Research Instituteand WWF has helped 32 million people access cleaner water;protected three million hectares o orest land; and throughdeveloping low carbon technology, is helping 20 o theworlds biggest cities to cut carbon emissions more quickly.The Partnership also delivered the largest ever orestresearch project.

Within HSBC itsel, we now have a global community o over

2,000 employees, called Climate Champions. EachChampion spends time out o the oce learning about theactions needed to make a positive impact on ourenvironment; knowledge which is then shared with

It was with immense pridethat I joined the celebrationsto mark the conclusion o theHSBC Climate Partnershipin 2011.

colleagues, riends and amily. The Partnership has alsobeneted rom a urther 63,000 days o volunteering romHSBC colleagues. This is a remarkable legacy which has onlybeen achieved with enormous commitment rom ourpartners and colleagues.

Looking ahead

As a bank, we look at how the patterns o projected growth,trade and consumption will contribute to our bottom line. Butwe also recognise that, i the world continues to overshoot

its resource capacity, there is the risk o localised, andeventually global, constraints on economic activity. Running asustainable organisation means balancing the needs ocustomers today (helping advanced economies recover romthe downturn and aster-growing markets strengthen anddeepen their economies) with the responsibility we have touture generations.

When reconciling these conficting demands, I think o howprevious Chairmen o HSBC took the decisions they believedwere right or the long term, even i they were not immediatecontributors in the short term. I am proud o this legacyand am determined that HSBC will be as successul andsustainable in the next 147 years, as it has been or thepast 147.

Douglas FlintGroup Chairman

May 2012


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In May 2011, HSBC set out a newstrategy to investors, employees andother stakeholders. Our objective isto deliver a compelling vision or the

long-term direction o the Group and totake action in the short term to delivera better return or our shareholders.

To be the worlds leading international bank

Our vision

1. Capital deployment

(ve lters)

2. Cost eciency

(our programmes)

3. Growth

Implementation o our strategy This relies on actions across three areas:

We are improving the way wedeploy capital as part o our eorts toachieve our targeted return on equityo 12 to 15 per cent over the businesscycle. We have introduced a strategicand nancial ramework assessingeach o our businesses on a set ove strategic evaluation criteria:international connectivity, economicdevelopment, protability, costeciency and liquidity. The resultso this review determine whetherwe invest in, turn around, continuewith or exit businesses.

We have launched our programmesto achieve sustainable cost savingso between US$2.5 billion andUS$3.5 billion by 2013, resulting in aleaner and more values-drivenorganisation: 1) implement consistentbusiness models; 2) re-engineeroperational processes; 3) streamline IT;and 4) re-engineer global unctions.Sustainable cost savings are intendedto acilitate sel-unded growth inkey markets and investment in newproducts, processes and technology,and provide a buer against regulatoryand infationary headwinds.

We continue to position HSBC orgrowth. We are increasing ourrelevance in ast-growing marketsand in wealth management, andimproving the collaboration betweenour international network obusinesses, particularly betweenCommercial Banking and GlobalBanking and Markets.

Alignment to long-term trends Our strategy is aligned to two long-term trends:

1. Financial fows 2. Economic developmentThe world economy is becoming ever-more connected.Growth in world trade and cross-border capital fowscontinues to outstrip growth o gross domestic product.Financial fows between countries and regions are highlyconcentrated. Over the next decade, we expect 35 marketsto represent 90 per cent o world trade growth and a similardegree o concentration in cross-border capital fows.

By 2050, we expect the size o economies currentlydeemed emerging will have increased ve-old, benetingrom demographics and urbanisation, and they will be largerthan the developed world. By then, 19 o the 30 largesteconomies will be markets that are currently describedas emerging.

Based on these long-term trends and our competitive position, our strategy has two parts:

1. Network o businesses connecting

the world

2. Wealth management and retail

with local scaleHSBC is ideally positioned to capture the growinginternational nancial fows. Our ranchise puts us in aprivileged position to serve corporate clients as theygrow rom small enterprises into large and internationalcorporates, and personal clients as they become moreafuent. Access to local retail unding and our internationalproduct capabilities allows us to oer distinctive solutionsto these clients in a protable manner.

We will leverage our position in aster-growing markets tocapture social mobility and wealth creation through ourWealth Management and Private Banking businesses.We will only invest in retail banking businesses in marketswhere we can achieve protable scale.


Our Strategy

Chapter 1. A Sustainable Strategy


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Va

lues

Gov

ern

ance

Risk

s

Sust

ain

ab

ility

Ourapproach


Our Approach

Strengthening our values

The role o HSBCs values in daily operating practice issignicant in the context o the external nancial servicessector and the wider economy, with changes to regulatorypolicy, investor condence and societys view o the roleo banks. We expect all o our employees to act withcourageous integrity in the execution o their dutiesby being:

dependable and doing the right thing;

open to dierent ideas and cultures; and

connected with our customers, communities, regulatorsand each other.

In 2011, we took steps to embed our values inthe business. We are ensuring that everyone

who works or HSBC lives by thesevalues and have made them a key part

o every individuals annualperormance review.

A sustainable businessWe believe that banks play a positiverole in the economy and society by

providing individuals and businesseswith the nancial services they need to

meet their ambitions. We ensure ourbusiness is sustainable by taking a long-

term view; valuing our employees; addressingthe direct and indirect impact we have on the

environment; and investing in the communities we serve.

We apply sustainability risk policies to our lending and workto support businesses involved in the transition to a lowcarbon economy. By managing the environmental impacto our own operations, we aim to reduce HSBCs annualemployee carbon dioxide emissions by one tonne, rom3.5 to 2.5 tonnes by 2020. We also invest in communityprojects, donating US$96 million to educational,environmental and other initiatives across the world in 2011.

Good governance

HSBCs governance structure is ocused on deliveringsustainable value to our shareholders. The strategy and riskappetite or HSBC is set by the Board, which delegatesthe day-to-day running o the business to the GroupManagement Board.

The Board has established non-executive committeesincluding the Group Audit Committee, which overseesnancial reporting matters; the Group Risk Committee,

which oversees risk-related matters; the GroupRemuneration Committee, which sets remuneration policyand senior executive pay; the Nomination Committee, whichleads the process or Board appointments; and theCorporate Sustainability Committee, which adviseson environmental, social and ethical issues.

Global businesses and unctionshave established operating,nancial reporting and managementreporting standards or applicationthroughout HSBC.

Managing our risksAs with all nancial servicesorganisations, we have to managerisks in our business. Our ocus is onidentiying, understanding and dealingwith those risks in line with our agreedrisk appetite. Robust risk governance andaccountability is embedded across HSBCand the Group Risk Committee monitors theeectiveness o our overall risk management. The Board,advised by the Group Risk Committee, approves HSBCsrisk appetite.

Our strong balance sheet and diverse lending portolio arekey actors in managing our risk prole. Our riskmanagement ramework also helps us to identiy bothcurrent and emerging risks, and ensures that our portoliosremain aligned to our risk appetite. We then use this to carryout stress tests to evaluate the impact o those risks.

How wemanage ourbusiness

Our values, robust risk management,good governance and commitmentto operating sustainably guide the waywe manage our business and helpus deliver value to our shareholdersand customers.


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For HSBC, sustainability means beingin business or the long term andmeeting the needs o the presentgeneration, without preventing uturegenerations rom satisying theirs.

Meeting thechallenges o todayand anticipatingthe opportunities

o tomorrow

Attracting,retaining anddeveloping thebest talent in aninternational

marketplace

This report sets out HSBCs approach to sustainability:how we incorporate sustainability into our business andwhat we did in 2011. It sits alongside the Annual Reportand Accounts2011 and Annual Review 2011, inormingshareholders and other stakeholders about our business.More detail about our sustainability activities can be oundat www.hsbc.com/sustainability.

Our approach to sustainability takes into account the viewso HSBCs stakeholders and our own understanding o theGroups impact on wider society. As a nancial servicescompany, the products we provide intermediate in theeconomy, bridging the gap between those who want to save,those who want to borrow and wider society. We also providethe hardware needed to move money around a moderneconomy, such as ATMs, credit cards and electronic transers.

How we serve our customers, value our employees andinvest in our communities has a social impact; the taxes andduties we pay in the regions we operate in and the dividendswe pay to shareholders (oten pension unds), have aneconomic impact; and the businesses we bank and our ownoperations have an environmental impact.

For these reasons, we believe a good bank must be run witha long-term view. It must be consistently protable, but notbe solely concerned with making a prot. Only then do wehave a sustainable business, able to attract and retain thecapital we need rom our shareholders, to continue tooperate.

We have identied six areas which, taken together, make ourbusiness sustainable.

Understandingthat thecompanies wenance have animpact on peopleand theenvironment

Managing ourenvironmentalootprint andreducing costs

Serving ourcustomers withthe products andservices theyneed and want

Investing inindividuals tocreatesustainablecommunities

Stra

tegy

Employees

Co

mmun

ity

investm

ent C

ust

ome

rs

op

erations

Sustainable

mana

gem

ent

Risk

Sustaining HSBCor the long term


Chapter 1. A Sustainable Strategy (continued)

Sustainability


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Engaging our stakeholdersListening to our stakeholders helps orm our approach tosustainability. This section gives a brie overview o ourstakeholder engagement.

Employees

HSBCs Global People Survey helps us to measure employeeengagement in order to understand what actions are neededto increase business perormance and to benchmark ourprogress both internally and externally. In 2011, 81 per cento our employees responded and employee engagementrose one percentage point to 69 per cent. We report the mainndings o the survey on page 22.

Customers

We serve 89 million customers in 85 countries and territories.

We engage with our customers through a wide variety ochannels, rom written and electronic communications, toclient events, customer panels and one-to-one meetings.Customer eedback is tracked across our businesses anddrives our business development.

Shareholders

With listings on the London, Hong Kong, New York, Paris andBermuda stock exchanges, shares in HSBC Holdings plc areheld by over 220,000 shareholders. In 2011, HSBC ran aprogramme o 906 senior executive meetings withrepresentatives o institutional shareholders in 27 countriesand territories. We held also meetings with over 30

Sustainable and Responsible Investment institutionalinvestors in London, Paris, Frankurt, Boston and New York.

Community representatives and charity partners

We work with a wide variety o charities as part o ourCommunity Investment programmes. Through our educationprogramme we partner SOS Childrens Villages, JuniorAchievement and the Foundation or EnvironmentalEducation. For the last ve years, we have been working withour leading environmental organisations the ClimateGroup, Earthwatch Institute, Smithsonian Tropical ResearchInstitute and WWF -- on the HSBC Climate Partnership.

Suppliers

In 2011, HSBC spent US$17.5 billion with approximately30,000 suppliers globally. We ask all o our suppliers tocomply with a code o conduct which sets HSBCsenvironmental, social and ethical standards or our supplychain. We are working with our key suppliers to develop newproducts and services to deliver our sustainability goals.

Non-governmental organisations (NGOs)

We engage with campaign groups on matters o sharedinterest. We are proactive members o a number o multi-

stakeholder orums, such as the Roundtable on SustainablePalm Oil, which brings together NGOs, businesses andnancial investors to agree standards o good practice orthe sector.

Governments and regulators

HSBCs Group Chairman, Group Chie Executive and othersenior executives engage with governments and regulatorsaround the globe on creating a sustainable nancial system.We believe it is in the interests o governments, banks,

investors and consumers to have a nancial system thatencourages competitive, vibrant and stable markets,providing consumers with the protection they need,businesses with the capital they require, and taxpayers withreassurance about the long-term viability o the bankingsystem, without adding unnecessary business costs orrevenue risk. In 2011, our senior executives had meetingswith politicians, regulators and ocials representingnational governments, the European Union and othersupranational authorities and we ormally responded tonumerous consultation papers issued by policy-makersaround the world.

Management and governanceUltimately, each o our colleagues contributes to makingHSBC more sustainable by managing one, or more, o thesix key areas identied, i.e. strategy, employees, customers,risk management, sustainable operations and communityinvestment.

HSBC has a Corporate Sustainability department withinGroup Head Oce and in each o our major regions andcountries o operation. These teams shape the Groupsapproach to sustainable business opportunities and risksand community investment. Many other specially trainedcolleagues across HSBC are also responsible or

implementing our approach to sustainability; or example,in credit risk, purchasing, IT, and relationship managementteams. Other aspects o sustainability are ully embeddedin the business -- or example, risk and environmentaleciency -- and are managed as business as usual.Customer and employee relations are core unctions othe Group.

Corporate Sustainability is represented on the GroupManagement Board through the Group Managing Directorwho has oversight o Corporate Sustainability and HumanResources, reporting to the Group Chie Executive.

The Corporate Sustainability Committee is composed onon-executive Directors and non-director members. In 2011,

the chairman was Narayana Murthy, a non-executive Director(appointed 28 May 2010) and the members were VincentCheng, an executive Director (retired 27 May 2011) and LauraCha (appointed 3 May 2011), Gerry Davis, Lord May andDame Mary Marsh, who are non-director members o theCommittee. The Committee held our meetings in 2011.

Sustainable economic contributionBy running a sustainable business, HSBC is able to make avaluable contribution to the economy by paying dividends toour shareholders; salaries to our employees; payments to our

suppliers; and tax revenues to governments in the countriesand territories in which we operate. In 2011, reported pre-taxprot rose by 15 per cent to US$21.9 billion.


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Sustainability at HSBC: over a decade o action2005

Sustainabilitybecomes amainstreamglobal issuewith launch oUN GlobalCompact andWorld

EconomicForumeaturingCorporateSocialResponsibilityon its agenda

LaunchDeenceEquipmentPolicy

2000 2001 2002 2003 2004

IssueSustainabilityRisk Standard

Sponsor frstHSBC ScholarsDay

LaunchEnvironmentalAction Plan andissueEnvironmentalRisk Strategy

Issue ForestrySector Policy

LaunchDiversityToolkit

Completefnancing otwo Scottishwind arms andfrst UK windsector tax lease

LaunchUS$50 millionpartnershipInvesting inNature withthree leadingconservationcharities

Form CorporateResponsibilityCommittee oHSBC Holdingsplc Board

Adopt EquatorPrinciples

Go carbonneutral

Issue ChemicalsPolicy andFreshwaterPolicy

Set three-yearenvironmentaltargets

Publish frstSustainabilityReport(independentlyassured)

Launch HSBCGlobalEducation Trust

Arrange fnanceor worldslargest eco-bussystem

StartsupportingStudents inFree Enterprise


Chapter 1. A Sustainable Strategy (continued)

The Board considers careully the appropriate distribution oprots. There has to be the right balance between retainingcapital (or business growth and resilience); rewardingshareholders or investing in us by paying dividends; andbeing able to attract and retain high calibre employees in aglobal marketplace. In 2011, 50 per cent o the prot availableor distribution was retained or growth and building capitalratios, 35 per cent was paid in dividends to shareholders,and 15 per cent allocated or variable compensation to sta.

Tax contribution

In 2011, HSBCs net cash tax contribution was US$8 billion.The amount diers rom the tax charge reported in the

income statement in the HSBC Holdings plc Annual Reportand Accounts 2011 due to taxes being included in pre-tax prot,the timing o payments and the eect o tax being deerred.

HSBC also plays a major role as tax collector or governmentsin the jurisdictions where we operate. In 2011, we collectedUS$8.7 billion in taxes.

Distribution o economic benets

US$b 2009 2010 2011

Net cash tax outfow1 5.2 5.8 8.0

Distributions to shareholdersand non-controlling interests 6.5 7.1 8.3

General administrativeexpenses including premisesand procurement 13.4 15.2 17.5

Employee compensationand benets 18.5 19.8 21.2

1 Includes cash outfows o corporation tax, employer payroll tax,irrecoverable value-added tax and other taxes.

15Variable pay

2

Dividends1

Retained earnings /capital

Pro forma post-tax profit allocation 2011%

50

35

1 Inclusive of dividends to holders of other equity instruments andnet of scrip issue.

2 Total variable pay pool for 2011 net of tax and portion to be deliveredby the award of HSBC shares.


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20072006 2008 2009 2010 2011

Launchground-breakingUS$100mHSBC ClimatePartnership

EstablishClimate Change

Centre oExcellence

LaunchClimate ChangeBenchmarkIndex

Issue Miningand MetalsPolicy

Establish GroupCorporateSustainabilityDepartment

Introduce frstGlobal PeopleSurvey

Chair EquatorPrinciples

Adopt versiontwo o EquatorPrinciples

Issue EnergySector Policy

EstablishDiversityTaskorce

Launch FutureFirst and Teachor All ordisadvantagedchildren

Begin supportor Rivers othe Worldproject

Win inauguralFinancialTimesSustainableBank o theYear Award

Adopt ClimatePrinciples

Set our-yeartargets orreducingenergy, water,waste andcarbon dioxide

Launch HSBCEnvironmentalInrastructureFund

EstablishEmployeeDiversityStrategy

Launch JuniorAchievementor 7-11 yearolds

EstablishCleantechEquipmentsector team

Begin reportingsector policycompliancelevels publicly

Supported frstproject fnancedoshore windarm

Launch HSBCeco-schoolsprogramme

EstablishClimateBusinessCouncil

Launch Group-wide papersourcing policy

Lead EquatorPrinciplesGovernanceRules

Diversity andInclusion Indexincluded inGlobal PeopleSurvey

Lead largestundraising incleantech sectorwith US$125minvestment

EstablishSustainableOperations2020 strategy

Reissue EnergySector Policy,one o the frstto cover coal,

oil sands andnuclear powerstations

Commit fvemore years ounding toFuture First

Complete sixthmajor fnancingor eco-bussystem

HSBC andEarthwatch win

InternationalGreen Award

Build SocialFinance portolio


0.9Other jurisdictions

Latin America

UK

Rest of Europe

Asia

Breakdown of total tax paid by region 2011US$b

1.5

1.41.9

2.3

1.2USA and Canada

Latin America

Rest of Europe

UK

Asia

Taxes collected for government 2011US$b

1.4

0.9

4.01.2

HSBCs net cash tax contribution 2011

US$b

Tax on prots 4.0

Employer taxes 1.8

Value-added tax 0.8

Other duties and levies 1.4

Total 8.0

Tax collected or governments 2011

US$b

Taxes deducted rom customer interest 3.5

Employees tax on pay 3.3

Value-added tax 0.4

Stamp duty and other taxes 1.5

Total 8.7


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Our products and services help customers meet their needsand ambitions in lie. This, in turn, has a broader social impactby creating nancial security and contributing to thegeneration o wealth.

As a business, we also recognise that we have aresponsibility to assess the environmental and social impactsthat our lending and investments can have and to manage

these impacts. We also have a duty to ensure our businessdoes not launder the proceeds o crime, or help und criminalactivity. Finally, we must understand, respect and manageour direct impact on the environment.

In this chapter, we highlight some o the ways we deliveredor our customers and the wider community in 2011.


To attract income over the long term,we must have the right strategy andproducts, so our customers will want

to continue doing business with us.Our customers place their trust in us,so we must meet their expectations.

Chapter 2. A Sustainable Business

Serving our Customers

I would like peopleto view HSBC as a

responsible institutionwhich is aware o itsrole in the community, istrusted by its customers,is a good and airemployer, and oersa stable, attractiveand positive return toits shareholders.Stuart GulliverGroup Chie Executive

US$21,872m

7.64.3

32.2

Global PrivateBanking

Global Bankingand Markets

Retail Bankingand Wealth

Management

Other

CommercialBanking

Contribution to profit before tax 2011 (reported basis)%

19.6

36.3


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Retail Banking and WealthManagement

In HSBCs Retail Banking and WealthManagement business, we aim to build longterm, sustainable, and mutually valuablerelationships with our personal customers,using our global scale to build compellingpropositions to meet their needs, andhelping them to achieve their ambitions.

Paul ThurstonChie Executive, Retail Banking and Wealth Management

Our Retail Banking and Wealth Management (RBWM)business looks ater the banking needs o individualcustomers.

Our major markets are the UK, the Hong Kong SAR, France,the US, Mexico, Brazil and Turkey. In 2011, we continuedto evolve our product oering to meet the day-to-daytransaction needs o our customers. We provided the nanceto help people meet their long-term ambitions, such as homeownership, and we widened access to services througheducation, targeting excluded groups and helping customersexperiencing nancial distress. We also record data oncustomer complaints to track our progress in resolvingthese problems.

Helping people meet their long-term ambitions

We provide the nance people need to realise theirambitions, such as owning their own home.

Brazil: We are one o the main mortgage providers in Brazil.In 2011, new mortgage lending grew by 85 per cent toUS$1.022 billion, rom US$554 million in 2010. We alsoissued a guide to all our customers in Brazil on how to maketheir home, and daily routine, more sustainable.

France: HSBC made US$3 billion o mortgage undingavailable, an increase o 11 per cent rom the previous year.

Hong Kong SAR: HSBC has been the number one mortgageservices provider since 2009, with new mortgage marketshare o 24 per cent in 2011, up rom 19 per cent in 2010.

Turkey: In 2011, we helped over 7,000 people buy a newhome, providing US$511 million in mortgage nance.

USA: HSBC Bank invested US$256 million in CommunityReinvestment Act-eligible investment unds which supportinitiatives designed to revitalise or stabilise low to moderateincome areas, or to provide aordable housing andcommunity services to people on low to moderate incomes.

UK: Since 2007, HSBC has increased its total mortgagelending to UK homeowners by over 75 per cent. Wecontinued to support the UK housing market throughout2011, providing a mortgage to one in seven rst-time buyersnationally and lending a total o US$21 billion overall. Weare making urther unding available to support personalcustomers who want to own their own homes. In 2012,we have committed to provide US$24 billion in mortgageunding, including US$4.8 billion or rst-time buyers, to

help a total o 150,000 customers.

Widening access and targeting help

Hong Kong SAR: Today almost one in ve people in HongKong is aged over 60. In 2010, we launched our SmartSeniors with HSBC Programme, recruiting 80 part-timepost-retirement sta to promote and manage areas withinbranches dedicated to serving the needs o the oldercustomer. In 2011, we recruited an additional 20 Smart Seniorsta, extending this service to over 50 per cent o our branchnetwork. We also supported the governments scheme todistribute US$771 to all adults, by undertaking outreachactivity to ensure senior citizens registered or the scheme.

UK: In response to the economic slowdown, in 2009 weestablished our UK Money Management Team, whichsupports customers beore they go into arrears. Our speciallytrained sta oer advice on budgeting, overdratmanagement and restructuring o debt, helping customers toavoid the stress o missed payments. The team has helpedover 70,000 people deal with their nancial diculties since itwas set up.

USA: Since 2003, more than six million consumershave visited HSBCs nancial education site,(www.yourmoneycounts.com). Consumers can accessinormation on homeownership, budgeting, managing credit,small business ownership and other nancial topics. In 2011,

YourMoneyCounts had more than 800,000 visitors.Global: HSBC has also helped more than 176,000 youngpeople with nancial literacy through the Junior Achievement

scheme. You can read more about this work on page 25.

Handling complaints

We have put in place processes and procedures across ourbusinesses to ensure that customer complaints are handledproperly.

France: While the number o total complaints remainedstable, the number o complaints reerred to theOmbudsman increased by 10 per cent, ollowing a 26 per

cent decrease in 2010.

Hong Kong SAR: Customer complaint volumes were downour per cent, while customer commendations increased 146per cent year-on-year in 2011.

85%increase in new mortgagelending in Brazil


14/36


Chapter 2. A Sustainable Business (continued)

Mexico: Customer complaints ell by 7 per cent in 2011 andwe continued to develop a centralised complaint workfow,helping to keep our complaint resolution service levels at98 per cent.

Turkey: 85 per cent o all customer complaints weresatisactorily resolved, while non-prompted customer

compliments rose 24 per cent year-on-year.

UK: Inormation provided by the Financial ServicesAuthority showed that when compared to peers, HSBC hasone o the lowest rates o complaints per 1,000 customersin both Banking and Credit and Mortgages, and HomeFinance categories.

USA: A Complaint Ombudsman Oce was established in2011, giving greater oversight and consistency to the way werespond to complaints and to make better use o customereedback to improve our processes. Last year, we made over50 improvements to customer experience, includingstreamlining operational processes, customer serviceeducation, and revising and rewriting 159 letter templates,

signicantly improving customer correspondence. Wereduced the average turnaround time or complaints bytwo days.

Remediation

On 5 December 2011, the UKs Financial Services Authority(FSA) ned HSBC US$17 million as a result o inappropriateinvestment advice provided to elderly customers inconnection with some products sold by an HSBC aliate,NHFA Limited (NHFA). HSBC closed NHFA to new businesson 1 July 2011. Our senior executives have been unequivocalin their apology. We recognise that our reputation wasdamaged by this incident and where we ailed, we will payull and proper compensation.

In December 2007, HSBC took the decision to stop sellingPayment Protection Insurance (PPI) in its UK branches andthroughout the rest o its business in 2008, ahead o most oits competitors. We have been working with the FSA and theFinancial Ombudsman Service to ensure all PPI complaintsare handled, and redressed, in accordance with the FSAsPolicy Statement PS10/12.

In both these cases, our priority has been to do the rightthing by our customers and learn rom what happened.

HSBC makes every possible eort to help customers retaintheir homes when they are acing nancial hardship. In theUS in 2011, we modied loans with balances o US$6 billionor some 29,000 customers o HSBC Finance Corporation. InApril 2011 HSBC, along with others in the mortgage industry,entered into consent orders with US regulators to revieworeclosure practices.

Commercial Banking

HSBC is the leading international trade and

business bank operating today. We have aresponsibility to use that position or thebenet o our customers, which will helpdrive global economic growth, ultimatelybeneting emerging and developedeconomies alike.

Alan KeirGlobal Head o Commercial Banking

Helping companies and economies grow

Supporting SMEs

In 2011, we continued to support the small and medium-sized enterprises (SMEs) that play a critical role in economicgrowth. Our global lending was up 10 per cent rom 2010.Lending to SMEs in the aster-growing economies o Asia,Latin America and the Middle East increased by 22 per cent.In the United Arab Emirates, we allocated a second trancheo US$100 million o unding or SMEs, ollowing the successo the US$100 million SME Fund in 2010. In the UK, we alsoexceeded our Project Merlin lending intentions to businesscustomers agreed with the government.

We expect UK trade to grow by 60 per cent by 2026. To

help SMEs to capitalise on this trend, in February 2012 weannounced a US$6.4 billion und to help rms with a turnovero up to US$40 million to expand their global trade activity.HSBC is also a major shareholder in the Business GrowthFund plc, a new investment company with resources o upto US$4 billion, established by the major banks in the UK toprovide long-term growth capital to SMEs. It was ociallylaunched in May 2011 and has a rapidly growing portolioo investments.

Supporting recovery and growth through trade

HSBC estimates that world trade volumes will grow by 86per cent by 2026, at a rate o about US$1 trillion a year until2016. By providing nance to our commercial customers, we

help them make the most o the opportunities presented byincreased trade, supporting global economic growth. We alsohave a role to play in economic recovery, equippingcustomers in the West with the knowledge they need toexpand their business across borders and using our ootprintto connect our customers to each other. In 2011, weacilitated 9 per cent o bank-nanced global trade amountingto US$510 billion and perormed more than 16,000successul cross-border transactions.

In 2011, we restructured our business to oer a ull serviceto our customers across traditional commercial lending,through to payments and cash management services andtrade and receivables nance. This will help us to deliverbetter supply chain solutions whatever the terms o trade.

Our Commercial Banking and Global Banking and Marketsteams work together to meet the increasingly diversiedneeds o international corporate customers, helping them togrow their businesses.


15/36


Global Private Banking

For our international clients, our global

ootprint means access to experiencedinvestment proessionals in multiplelocations worldwide. We provide a rangeo sophisticated investment opportunitiesor those who have acquired or accumulatedwealth. We also help clients develop theirassets to benet themselves and society helping them invest in philanthropicprojects and in companies with a positivesocial impact.

Krishna PatelChie Executive, Global Private Banking

Sustaining wealth or uture generations

Our Global Private Banking business helps individuals andamilies manage their inter-generational wealth. Businessamilies are the building blocks o most Asian economiesand, as economic development gathers pace, so doeswealth creation. Today, over 50 per cent o our PrivateBank assets and signicant net new money comes romaster-growing markets.

Without a coherent plan, amilies can enter a negative cycle

in which the rst generation creates wealth withoutembedding its value and the second generation stabilises theassets without enabling urther growth. Oten, the wealthcan be depleted when the third generation takes over theamily business.

HSBC helps amilies develop their tangible and intangibleassets to benet themselves and society, encouraging themto think about their legacy over the long term, such as thenext 30 or even 100 years. Our advisers help to createownership structures such as trusts and other holdingvehicles, as well as designing governance arrangements. Wealso help implement other nancial capital strategies such asamily oces.

More clients now want to become strategic philanthropists,applying techniques learned in prot-orientated enterprisesto make more meaningul contributions to social change.Research suggests that between 2009 and 2011, charitablegiving in China alone doubled rom US$4.9 billion to US$10.3billion. Our philanthropy experts help clients set specic goalsor their giving, engage proessional partners to meet thosegoals, and measure the impact o their eorts. Approachescan vary rom oundations to venture philanthropy. In 2011.we provided specialist philanthropy services to over 240charitable trusts, globally holding assets in excess oUS$2.3 billion.

Global Banking and Markets

Global Banking and Markets has a unique

client and geographic ootprint. This enablesus to support companies and governmentsrom emerging regions as they seek tostrengthen and deepen their local economies.

Samir AssaChie Executive, Global Banking and Markets

Facilitating economic development

Financing South-South trade

The developing network o new South-South trading routesconnecting Asia, the Middle East, Arica and Latin America isset to revolutionise the global economy. We believe tradeand capital fows between the worlds aster-growingmarkets could increase tenold in the next 40 years. OurGlobal Banking and Markets business ocuses on many highgrowth markets and trade routes. Year-on-year we have seenSouth-South business grow by over 40 per cent.

This revolution in trade is also powering the growth o therenminbi, which is orecast to be the worlds third largesttrade currency in 2012. It is also ast becoming an investmentcurrency. In 2011, HSBC played a pivotal role in issuing LatinAmericas rst-ever dim sum deal a three-year yuan bond.This landmark deal will acilitate similar deals, encouraging

new investment fows between Asia and Latin America. InApril 2012, we announced the rst international renminbi-denominated bond outside Chinese sovereign territory.

Supporting infrastructure development

In aster-growing markets, South-South connections will beacilitated by better inrastructure, which needs investment.Western governments acing economic challenges alsorequire nancial support i they are to maintain and enhancetheir national inrastructure.

Between June 2010 and June 2011, HSBC completed 48inrastructure and project nance deals in 25 countries, witha total value o more than US$50 billion. We were named

Global Best Inrastructure and Project Finance House or2011 by Euromoney. HSBC was also named Most Innovativein Inrastructure and Project Finance by The Bankeror thethird year in a row.

10%increase in global lendingto SMEs in 2011


16/36



Responsible investmentWe recognise that good management o environmental andsocial risks, and opportunities contributes to long-termbusiness success. HSBC Global Asset Management is

committed to investing our customers money responsibly.In June 2006, we became a signatory to the United NationsPrinciples or Responsible Investment and we are an activemember o the United Nations Environment ProgrammeFinance Initiative (UNEP FI). To examine the investmentimplications o climate change, we are also a member o theInstitutional Investors Group on Climate Change. In additionto these activities, we oer Sustainable and ResponsibleInvestment unds or clients who wish to invest according tospecic environmental, social or ethical criteria.

HSBC Global Asset Management has excluded clustermunitions and anti-personnel mines across its entire activelymanaged investment range. The policy regarding passiveinvestments is under constant review. To ensure all cluster

munitions and anti-personnel mine-related companies areexcluded, HSBC uses the services o the research organisationEthix, in addition to conducting our own due diligence.

Preventing crimeHSBC has clear policies and procedures to guard against theGroup being used, unwittingly, to enable others to laundermoney, which is potentially linked to criminal activity or taxevasion; to nance terrorism; to make and receive corruptpayments, where these can be identied; and to overcomeeconomic sanctions. These saeguards operate at all levelsand in all businesses throughout the Group.

Financial institutions make a contribution to the ght againstmoney laundering, bribery and corruption. It would be arharder or individual countries and supranational bodies, suchas the UN, to implement counter-measures or to applyeective restrictions without the assistance o banks likeHSBC. Every day, HSBC contributes considerable time andresources to monitoring millions o transactions o all kinds.This is a demanding and complicated task or an organisationwhich operates in 85 countries and territories. However, wewillingly commit these resources because it enables us tomeet our obligations to legislators and regulators, it helps tosustain our business and our reputation, and it supports thegood governance o the countries in which we operate.

HSBC is committed to improving standards o businessintegrity. We have suitable policies and procedures in place tocounter bribery and corruption. In 2011, we established aGroup Bribery Committee at executive level to ensurecompliance with the letter and spirit o all laws coveringbribery and corruption and, in particular, the UK Bribery Actwhich is extraterritorial in nature. This committee alsoconsiders all aspects o bribery and corruption risk. A processis under way to mirror this executive committee structureconsistently in principal subsidiaries and business unitsthroughout the Group.

An established mechanism is in place or employees toreport suspicions, including allegations o bribery andcorruption, and also to escalate concerns to the highest levelin the company where appropriate. Full details o legalproceedings and regulatory matters are given on pages405-409 o the Annual Report and Accounts 2011.

Social inanceIn additional to running our mainstream businesses, providingnance to customers over the long term, we believe nanceshould be used to support communities and the wider

society. Social nancing takes mainstream nancingtechniques and applies them to projects which will delivera specic social, as well as economic benet, oten atsub-scale levels.

In 2011, we increased our support or social nanceby building a portolio o investments. This included aUS$6 million contribution to Big Issue Invest SocialEnterprise Fund, which invests capital in, and providesbusiness support to, social enterprises. We also investedUS$16 million in Bridges Ventures Fund III, a sustainablegrowth capital und which ocuses on SMEs in the socialenterprise and environmental sectors.

In 2011, the UK government launched a US$962 millionnancial institution to grow the social investment market.Big Society Capital is mainly unded rom money let in bankaccounts which have been dormant or more than 15 years.HSBC and three other high street banks also agreed to investa urther US$80 million each in the und, as part o widerdiscussions with the government to increase the positivecontribution banks make to society and economic recovery.

In France, HSBC has invested US$1.4 million in CitizenCapital, one o the countrys leading growth capital undsin the social venture sector. HSBC France also issued aUS$60 million bond or the regional government o the Paysde la Loire, which will be used to support apprenticeships,social housing, and the construction and renovation oschools to a higher environmental standard.

Islamic inanceIn 1998, we established HSBC Amanah, our Islamic bankingbusiness, to meet the growing needs o customers in theemerging markets o Asia and the Middle East or Shariah-compliant banking. Today, Amanah is a global businessserving retail, corporate, sovereign, private bank andinstitutional customers. In 2012, we were named BestInternational Islamic Bank by Euromoneymagazine or thethird consecutive year.

HSBC Amanah is also a leading sukuk(bond) house. In 2011,we were the top underwriter o international sukukwith a 25

per cent market share and Gul Co-operation Council sukukwith a 21 per cent market share. Last year also saw a sukuklaunched by HSBC Bank Middle East, the rst to employ adual structure consisting o specialist Islamic nance(mudarabawith a saleand wakala) elements. This deal wenton to win Euromoneys 2012 Most Innovative Deal awardand its structure has now been replicated by other banks.

HSBC Amanah is also emerging as a key player in Islamicproject nancing, essential to meeting the inrastructurerequirements o growing nations. In 2012, we wonEuromoneys Best Project Finance House and Best ProjectFinance Deal awards. Project nancing is a natural t withIslamic nance since both are about building a stable utureby investing in the real economy and putting capital toproductive use or societys benet. Our Amanah businessmeets the cross-border Shariah-compliant needs o ourcorporate customers, supporting trade fows between Asiaand the Middle East.


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Climate Business

We recognise and support the move

to a low carbon economy, which willbenet society in the long term. Wealso recognise that this is a businessopportunity not just or our customersbut also or HSBC.

Climate and clean tech research

HSBC established a Climate Change Centre o Excellence in2007, based in our Global Research division. Last year, GlobalResearch produced over 160 climate and clean techresearch notes or institutional investor clients. The research

covered topics such as the implications o climate change oragriculture, climate vulnerabilities across the G-20 countries,global energy trends to 2050, and clean tech marketorecasts, as well as in-depth analysis o risks andopportunities in China and India. In 2011, Global Researchwon the Thomson ReutersExtel awards or being thenumber one team or integrated climate change, number oneclimate analyst and number one team or renewable energy,and number three team overall or sustainability research. InMarch 2012, the team were highly commended in theFarsightAwards.

Supporting the development of climate business

Our Global Banking and Markets business has specialised

Renewable Energy and Clean Tech teams, which work tosupport customers operating in this sector globally. In 2011,we were the sole co-ordinator on a US$200 million rightsissue or Soitec, a global leader in concentrated solartechnology. We led and structured the largest internationalwind project nancing to date in India or the Genting Group.HSBC also supported Asia-Pacics rst oshore dim sumbond issue amounting to RMB750 million (US$116 million)or China WindPower Group.

In 2011, HSBC also provided structured nance or low-emission bus systems in Johannesburg and Panama City.This brings the total number o cities we have supportedin this area to six, making HSBC the market leader. We havealso arranged a syndicated Islamic nancing acility or a

What is climate business?We dene climate business as the goods and servicesthat will thrive in the transition to a low carbon economy.

It comprises our major areas o opportunity: increasing the share o low carbon energy production,

such as bio-energy, solar and wind;

improving energy eciency in buildings, industryand transport, as well as energy storage;

adapting to the impacts o climate change, particularlyin agriculture, inrastructure and water; and

providing climate nance, including environmentalmarkets, debt and equity investment and insurance.

19

5

3Other

N America

IndiaOther Asia

China

Europe

Latin America

HSBC climate business by region 2011%

15

10

4

44

12

46

Energy efficiency

Solar

Transport

Wind

Biomass

HSBC climate business by sector 2011%

12

26

4

Malaysian eco-residential and commercial developmentproject, which aims to become the rst integrated greenluxury development in the country.

Recognising the wider opportunities climate businesspresents, in 2010 HSBC established a Climate BusinessCouncil, comprising representatives rom our globalbusinesses working in this area. The purpose o the councilis to set strategy, ensure HSBC is working in a joined-upway across our business unctions, and seize opportunitiesin the sector.

We have been building our internal capability in climatebusiness within our Commercial Banking business. In 2011,we established the Commercial Banking Climate BusinessWorking Group, comprising executives rom around the worldresponsible or implementing the climate business strategy.

We have also set up business development teams, whichsupport ront-line colleagues in identiying new climatebusiness leads. Last year, we recruited dedicated CommercialBanking relationship managers in China, India and the UK. Wewill recruit a North America manager in 2012. These managerswill be responsible or training, building awareness and, mostimportantly, prospecting or business in the sector.

In 2011, we aimed to include commercial targets or climatebusiness across a range o our business unctions. Due tothe scale o our business reorganisation, this was notpossible. By the end o 2012, we aim to include commercialtargets in HSBCs Global Banking, Global Asset Managementand Commercial Banking businesses.


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Sustainability Risk Management

We assess the potential impacts oour commercial customers on peopleand on the environment. As a leadinginternational bank, we understandthat managing the risks posed by thecompanies we do business with is oneo the main ways we can contributeto a more sustainable world.

We recognise that our customers, investors, employees andother stakeholders may have concerns about the impactso the companies we bank. Managing sustainability riskhelps drive business opportunity. By assessing the risks odeveloping technologies in sectors like energy, we are betterable to identiy investment opportunities and avoid uture risk.

HSBC policies, processes and people

It is nearly a decade since we issued our rst sustainabilityrisk policy. Today, we have ve voluntarily-established sectorpolicies, which set out clearly the standards we expect ocustomers which operate in orest land and orest products;mining and metals; chemicals; reshwater inrastructure; and

energy sectors.

We also have a Deence Equipment Policy. In 2010, inadvance o UK legislation we introduced new criteriastipulating that we will not provide nancial services tocustomers including holding companies whichmanuacture or sell anti-personnel mines or cluster bombs. In2011, we exited any outstanding relationships withcustomers which did not meet these new criteria.

In 2010, we completed an extensive review o our EnergySector Policy. Last year, we successully implemented one othe rst policies amongst nancial institutions to covercustomers operating in the coal-red power, oil sands andnuclear power industries, which was welcomed by many o

our stakeholders, including our customers.

Summaries o all our policies can be viewed at:www.hsbc.com/sus-risk

These sustainability risk policies set out the ramework andstandards which inorm decisions made by risk, business andrelationship managers across the bank. Some 41,000customers are assessed against our sector policies. Thepolicies are applied to all lending by HSBC and other orms onancial assistance, primary debt and equity marketactivities, project nance and advisory work. They alsoextend to asset management, but we recognise the lesserdegree o infuence we have over third-party investmentwhere the nal decision may not rest with HSBC.

We check whether customers meet the criteria set out in oursector risk policies, using the same system as we use ormonitoring credit risk. This data is then also checked throughour internal audit system.

We have sustainability risk managers in every region andoer comprehensive training or employees who are requiredto assess sustainability risk. A new e-training module onsustainability risk was launched in July 2011. By December2011, over 4,000 employees had completed this course and,in total, over 6,000 employees have been trained in managingsustainability risk.

When customers do not comply, our preerence is always toadvise and encourage them to make the necessaryimprovements to their sustainability policies and perormanceto meet our criteria. When these customers demonstrate noprogress towards compliance despite our eorts, we will exitthe relationship. At the end o 2011, only 0.15 per cent o ourcustomers were non-compliant with our policies, down rom0.2 per cent in 2010. This decrease is mainly due to HSBCexiting relationships with the customer when a loancommitment expires, but also refects the movement osome customers into the near compliant category.

Issues raised in 2011

Nuclear power continues to attract strong views, bothpositive and negative, rom our stakeholders and in widerpublic debate. When considering business in this sector, wealready cautiously review each application on a case-by-casebasis, taking into account saety and regulatory standards,the operators track record, and plans or waste storage and

decommissioning in accordance with our 2010 policy. Wealso use independent experts on the sector to provide asound technical understanding or our analysis and standardsproduced by international institutions, such as theInternational Atomic Energy Agency, assist our assessment.


Customer compliance with HSBCs sustainability riskpolicies 2011

%

Leader 2.54

Compliant 95.44

Near-compliant 1.87

Non-compliant 0.15


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On 11 March 2011, Japan experienced its largest recordedearthquake, triggering a tsunami which damaged its nuclearpower station at Fukushima. Following this event, we elt itprudent to conduct a thorough review o the small number onuclear power stations we nance. We ound that they metour policy and were not exposed to the same risks whichaected Fukushima. Nevertheless, we continue to reviewthe ongoing investigations rom the Fukushima disaster sothat they can be considered in uture policy updates.

We also continue to review our approach to the energysector in the wake o the deepwater oil spill in the Gul oMexico and concerns about the impact o shale gasoperations on the environment and communities.

Last year, we were approached by an NGO which raisedconcerns about a orestry customer. The concerns centred onwhether the company had adequately respected the landrights o local communities. Our Forest Land and ForestProducts Sector Policy requires independent certication thatoperations are legal and sustainable. We accept ForestStewardship Council (FSC) certication or this purpose. Wetake any complaint against our customers seriously and havemet the NGO to discuss the issue. We have also heldmeetings with the customer concerned. We are satised thatour customer has achieved FSC certication or two o its

operations and is in the process o assessment or a third.

Equator PrinciplesHSBC adopted the Equator Principles in 2003. This is aramework used by nancial institutions to assess andmanage the environmental and social risks o projects beingnanced. The Principles have helped ensure that largeprojects are developed and consequently operate inaccordance with good international environmental andsocial standards.

Equator Principles Financial Institutions apply the rameworkto project nance where the projects capital costs are US$10million or more. Since 2004, HSBC has voluntarily taken this astep urther by being one o the rst banks to extend thePrinciples to export credit and corporate loans, where theproceeds are known to be designated or a particular project.In 2011, we nalised urther guidance to help our relationshipmanagers consistently apply the Principles to such loans.

20Americas

Asia-Pacific

Europe,Middle East

and Africa

Equator Principles: loans by region of borrowerby % value 2011

51

29

18Infrastructure

Transport

Other

Mining and metals

Telecommunications

Power

Oil and gas

Equator Principles: loans by industry sectorby % value 2011

20

9

415

4

3

HSBCs implementation o the Principles is initiated byrelationship managers who conduct an analysis o thecustomer and project to assess or compliance. Our riskteams review and approve this transaction, or escalate tosenior management or urther consideration i necessary.

When we provide advisory services to projects, we gobeyond the standard advice o mentioning the benets oapplying the Principles. We also use our role to infuencepositively the projects approach to environmental and socialrisk management.

Since 2009, no transactions have been declined by HSBC onthe grounds o sustainability risk under the EquatorPrinciples. Our relationship managers are identiying potential

challenges at an earlier stage, and are helping prospectivecustomers to mitigate against them, or they are deciding notto proceed with a loan approval request.

Since we ask our customers to produce independentcertication through a number o our policies, we subjectourselves to the same level o scrutiny. HSBC was one o therst banks, and remains one o a handul, to commission anindependent audit o our implementation o the Principles.For 2011, PricewaterhouseCoopers LLP was invited toreview our application o the Equator Principles.

In 2011, HSBC actively sought to shape the new version othe Principles. We have been an advocate or the extensiono the Principles into loans where the proceeds are known to

be designated or a particular project, and or independentaudits to be standard or members. Consistentimplementation o the Principles would provide greaterprotection or people and the environment. At the time o thisreports publication, an outcome had not yet been agreed.

Climate risk

HSBC regularly assesses and manages the material risksarising rom climate change, regulation relating to climatechange, and potential natural disasters in relation to our ownbusiness. In 2011, amongst other issues, we examined theimpact o heat and drought on businesses in India and howthis might aect our own business and operations.


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2009 2010 2011

Number Value (US$m) Number Value (US$m) Number Value (US$m)

Transactions approved 57 4,562 76 6,707 63 4,643

By mandate

Lending 42 4,562 52 6,707 42 4,643

Advisory 15 0 24 0 21 0

Loans by category1

Category A 5 1,297 6 1,644 9 1,432

Category B 27 2,183 31 4,063 24 2,274

Category C 10 1,082 15 1,000 9 937

Loans according to scope o EP 2

Standard transactions 25 2,795 25 3,173 28 2,889

Extended transactions 17 1,767 27 3,534 14 1,754

Loans by region

Americas 9 491 11 979 9 948

Asia-Pacic 12 2,028 11 1,289 12 1,349

Europe, Middle East and Arica 21 2,043 30 4,439 21 2,346

Loans by industry sector

Inrastructure 8 1,322 9 1,382 9 853

Mining and metals 0 0 2 104 3 411Oil and gas 10 1,232 8 1,214 14 1,881

Power 16 1,518 18 2,362 10 931

Telecommunications 3 314 8 439 1 215

Transport 1 1 1 2 2 151

Other 4 176 6 1,203 3 200

Renewables 7 275 6 888 5 477

% o power 44 18 32 38 45 50

% o total 17 6 12 13 7 8

Transactions declined 0 - 0 - 0 -

1 Category A: Projects with potentially signicant adverse social or environmental impacts that are diverse, irreversible or unprecedented.

Category B: Projects with potentially limited adverse social and environmental impacts that are ew in number, generally site-specic, largely reversible andreadily addressed through mitigation measures.Category C: Projects with minimal or no social or environmental impacts.

2 We extend Equator Principles to export credit loans (extended transactions), the procedures or which are presented in our Reporting Guidelines(www.hsbc.com/sus-assurance).

Equator Principles: transactions vetted by HSBC



Statement on the application o the Equator PrinciplesIn 2011, HSBC applied the Equator Principles to project nance loans, advisory services and export creditloans as set out in the 2006 Equator Principles and in accordance with the Reporting Guidance ound

120525 sustainability report 2011

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