ICE & VBM PROJECT REPORT

PROJECT REPORT ON CSR ACTIVITIES OF HSBC BANK

Submitted to: Dr. Rajul Singh

Submitted by: Anuj Sharma FT-10-829

INTRODUCTION The concept of CSR recognizes an organizations commitment to operate in a socially responsible manner. It takes into consideration the social and environmental implications of corporate financial decisions. The potential benefits of CSR have generated interest of regulatory authorities, society, NGOs, employees, customers as well as international bodies to the issue.

IMPORTANCE The essence of CSR in business is whats known as the triple bottom line: People, Planet, and Profit. This strategy requires mutual benefit between corporation and non-profit, authenticity, and credibility. CSR is a powerful way to maintain a good corporate reputation but is not a silver bullet. It has become a widely accepted strategy by both corporations and consumers. The following points brings out its importance

As Value Creation
y y y y Promote competitiveness & innovation. Promotes a sustainable business model. Integrate business into the community. Develops human capital.

As Risk Management
y y Mitigates operational impact. Supports external relationships.

As Corporate Philanthropy

COMPANY OVERVIEW Headquartered in London, HSBC is one of the largest banking and financial services organizations in the world. HSBC's international network comprises around 7,500 offices in over 80 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. For HSBC, corporate social responsibility (CSR) is defined as managing our business responsibly and sensitively for long-term success, by working with our customers, shareholders, colleagues, communities and other stakeholders.

Reasons to select HSBC Bank: At HSBC bank, involvement in CSR activities is from top to bottom. Commitment to social issues starts from chairman of HSBC worldwide to chief executive. Even after being an MNC bank they are able to address the social causes In India and are willing to contribute to certain philanthropic issues such as unemployment, climate change, child labor and other social causes. COMPANY VALUES y y y y y y y y y y y y The highest personal standards of integrity at all levels; Commitment to truth and fair dealing; Hands-on management at all levels; Openly esteemed commitment to quality and competence; A minimum of bureaucracy; Fast decisions and implementation; Putting the Group's interests ahead of the individual's; The appropriate delegation of authority with accountability; Fair and objective employer; A merit approach to recruitment/selection/promotion; A commitment to complying with the spirit and letter of all laws and regulations wherever we conduct our business; The promotion of good environmental practice and sustainable development and commitment to the welfare and development of each local community.

CORE IDEOLOGY Open to different ideas and cultures Having a diverse and inclusive culture underpinned by a meritocratic approach to recruitment, selection and promotion Putting the team's interests ahead of the individual's Being a fair and objective employer Connected with our customers, community and each other Proactive and hands-on management at all levels Appropriate delegation of authority with accountability Ethical and sustainable business practice, taking responsibility for the social and environmental impacts of decisions, especially in relation to lending and investment. Commitment to the welfare of communities and the environment Dependable and doing the right thing Openly esteemed commitment to quality, competence, truth and fair dealing Commitment to complying with the spirit and letter of all laws and regulations wherever the Group conducts its business

y y y y y y

y y

Having and displaying highest personal standards of integrity at all levels

VISION: As a member of HSBC family which has been serving its millions of customers worldwide since 1865, to take our place among Turkeys most powerful, most profitable, most admired leader banks. MISSION: Having regard to ethical values; to meet its customers financial needs in the fastest and most appropriate way, to continue innovative works in order to achieve: human resource with superior qualities, technological infrastructure and service packages. CSR FRAMEWORK & GOALS

CORE THRUST AREAS FOR REPORTING CSR FOR PRIVATE BANKS (2009 REPORT)

BENEFITS TO SOCIETY/STAKEHOLDERS

Benefits to Society y Livelihoods: HSBC works in partnership with SHARE (Society to Heal, Aid, Restore and Educate) and SCESA (Sophia College ExStudents Association) in Raigad district to empower villagers through Rain Water Harvesting techniques and small economic activity. Establishing women SHGs and providing economic independence to women in villages have created life of dignity, respect and happiness. Environment:

1. HSBC Global Environment Efficiency Programme, a fiveyear programme aimed to reduce the Group's impact on the environment through a series of initiatives, including the introduction of renewable energy technology, water and waste reduction programmes and employee engagement. 2. Launch of HSBC Climate Confidence Index 2007 measured attitudes across 9000 consumers in 9 countries, to give a profile of how people are thinking about climate change. 3. The HSBC Global Climate Change Benchmark Index is a global reference index, which has been designed to reflect and track the stock market performance of key companies that are best placed to profit from the challenges presented by climate change. Benefits to Stakeholders y Customers: Promoting good customer relations is a vital part of our business. We generally seek to respond within 48 hours to customer complaints and use them as opportunities to learn and improve. Regular surveys are conducted to monitor consumer satisfactions in most of our area of operations. This measure is used to determine staff performance and determine individual rewards for employees in our larger businesses. Investors: Their increased engagement with investors reflects a significant growth in the number of group meetings that they are hosting .In 2010, they held meetings with almost 60 % more investors than in 2009. Government: In keeping with our long-standing policy, we made no donations to any political parties or organizations in 2005. While we do not generally lobby politicians or legislatures, in the US it is essential to work with state and federal law-makers in order to manage business risk. Our US Government Relations department advocates responsible public policy positions and helps legislators to frame laws that are fair to consumers,

Society at large and the finance industry. y Non-Governmental Organization(NGO): We are in regular contact with various special interest groups and non-governmental organizations (NGOs).We acknowledge the need for transparency in our products and services, such as lending, and seek the right balance between this and protecting our commercial and customer interests. We will investigate, and take action relating to, possible social or environmental impacts of any projects financed by us. Certain NGOs have been consulted in the review of our sector guidelines prior to their implementation to ensure we consider impacts on the wider world. Microfinance: HSBC started with a lending programme for small Microfinance Institutions (MFIs) in 2005, but after having built up a reasonable degree of understanding of this segment, has started offering commercial loan products to large MFIs also to help them provide micro credit to the financially excluded in India. These institutions provide small loans to groups of poor people (mostly women) using wellestablished micro credit delivery methodologies. We have sanctioned facilities totaling INR 660M between JanApr08 to MFIs and presently the total number of members covered by MFIs, which have accepted our facilities, is 3.2M. In 2008, we have put in place a microfinance strategy, with the objective of increasing our presence in this segment and building around a lending portfolio, a host of services which can facilitate capacity building, improve operational efficiency and bring the best practices of a transactional banking business to the microfinance domain.

Other Projects:
y

SOS Children's Villages: HSBC supports the work of SOS Children's Villages in New Delhi, Kolkata, Bhuj, Anagpur and Latur. SOS India's mission is to provide abandoned and orphaned children with a family, a home, education and a foundation for an independent life. Childlink Foundation (Magic Bus): HSBC supports a group of street children between the age of 810 years at Magic Bus by facilitating their nonformal education through outdoor sports, day trips and weekend trips. HSBC Gijubhai Bal Academy with Ganatar, Patadi, Surendranagar district, Gujarat: HSBC works with Ganatar to educate children of salt pan workers by establishing schools in desert communities. On campus, Ganatar conducts teacher training programmes and vocational courses for children from the Raan of Kutch. Happy Home and School for the Blind, Mumbai: Happy Hope imparts education for blind and visually impaired children. HSBC provides support to their annual pottery workshop and exhibition.

y y

Future Hope: is a home and school for street children in Kolkata, supported by HSBC through annual donations. Prayas: Prayas works for the care, protection and rehabilitation of neglected street and working children. HSBC supports the Naya Prayas project in Delhi slums and helps provide outof school children with education. Doorstep School: Doorstep school works in slum communities around Mumbai's port areas to establish Early Childhood Education (ECE) centers. It is an effort to commence a systematic and early educational intervention in the lives of the children from the community. SUPPORT: SUPPORT helps children on street of Mumbai who are prey to drug abuse, crime and disease by mainstreaming them and offering complete rehabilitation. It provides an opportunity for better life for these children through education, medical care, return to families/ parents, vocational training and livelihood assistance. Sense International (India): Sense International (India) is a leading organization in South Asia developing programmes for deaf blind people. They enable and empower local partners to provide direct services to deaf blind people. As a result of their work there are now 33 deaf blind programmes in 17 different states of India. Nanhi Kali: A project jointly managed by K. C. Mahindra Education Trust and Naandi Foundation. Nanhi Kali is a nationwide project to support the education of disadvantaged girls. Ensuring that girls are in school and that they get 10 years of uninterrupted formal quality education is the aim of the project.

CONCLUSION Banking sector in India is showing interest in integrating sustainability into their business models but its CSR reporting practices are far from satisfaction. There are only few banks which report their activities on triple bottom line principles. As a matter of fact, the standards for rating CSR practices are less uniform in comparison to that for financial rating. This leads to problem in comparison of corporate houses and determining the CSR rating. The adaptation of reporting CSR practices though quite slow in India, still it would definitely get a great pace in near future. The recent initiatives of Reserve Bank of India in this regard are expected to bring a drastic change in the near future. Banks must also provide proper training to its employees on environmental and social risks in leading to ensure that climate change is taken into account in corporate banking decisions. The follow up of Equator principles and other CSR reporting measures shall be strictly dealt and implemented .Until and unless Environmental authorities are serious about this, the financial institution will face a lot of problems. HSBC bank has well defined codes of business principles, ethics and codes of conduct, with associated internal systems and controls backed up by functional communication network