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The Foreign Bank Association of Indonesia (FBAI) has formed a
special working committee on sustainable development that aims to
formulate a standard for best lending practices to be adopted by FBAI
members.
Speaking during a discussion on sustainable lending, the CEO of HSBC
Indonesia, Richard McHowat, who also heads the FBAI, said Wednesday the
committee was in the early stages of identifying the practices of its
members in Indonesia and promoting awareness on sustainable development.
The FBAI was formed in February 2006, and includes as members ABN Amro,
CitiBank, Rabo Bank and Standard Chartered, as well as joint venture
banks. The association currently boasts 33 members.
"In formulating the standard for best practices, we will adopt the
global standard of best practices for sustainable development and adopt
it into an Indonesian context," McHowat said.
"For us, it is no longer about the willingness to implement sustainable
best practices, but more about prioritizing them while waiting for the
right moment."
As an example, McHowat said that under his company's environmental risk
standard, it must ensure that all decision-making processes fully
address environmental-risk assessment and establish suitable procedures
for dealing with proposed transactions of an environmentally sensitive
nature.
"We have been around from 121 years and we do not want to ruin our
reputation by supporting a project that is potentially harmful for the
people and environment," he later told The Jakarta Post.
Amol Titus, HSBC Indonesia head of risk analysis and sustainability,
said that companies that embraced the principles of sustainability
actually improved their chances of securing longer-term viability and
success as they became more "bankable."
"HSBC in Indonesia has already started to develop portfolios of
customers whom we regard as sustainable and the Bank is supporting them
by providing a range of facilities, including working and trade
capital, cash management and foreign exchange services," he said.
Sustainable development seeks to relieve poverty, create equitable
standards of living, satisfy the basic needs of all people, produce
sustainable economic growth and establish sustainable political
practices, while taking the steps necessary to avoid irreversible
damage to natural capital.
It does not focus solely on environmental issues as it also encompasses
three general policy areas: economic, environmental and social.
Also speaking during the seminar was WWF Indonesia executive director
Mubariq Ahmad, who described some of the challenges in bringing
Indonesian corporations on board.
According to Mubariq, the foremost challenge in convincing corporations
in Indonesia to adhere to environmental principles was the difficulty
involved in identifying and contacting their owners. This was
particularly true of those in the forestry business.
Globally, HSBC has announced a five-year US$8 million environmental
partnership with the Smithsonian Tropical Research Institute to fund
the largest-ever experiment on the effects of climate change and how it
will affect the world's forests.
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