HSBC announces groundbreaking project to understand impact of climate change on world's forests

12 February 2007

New Smithsonian Institution 'Global Earth Observatory' will compare climate change and forest carbon data from 17 countries

HSBC has announced a five-year, US$8 million environmental partnership with the Smithsonian Tropical Research Institute (STRI) - the only Smithsonian bureau based outside of the United States and whose mission is tropical rainforest ecology and other biodiversity issues – to fund the largest ever field experiment on the long-term effects of climate change and how it will affect the world's forests.

L-R Dr Ira Rubinoff from the Smithsonian Tropical Research Institute (STRI) with Joseph Salterio (HSBC Panama), HSBC Group Chairman, Stephen Green and Sandy Flockhart (HSBC Latin America & the Caribbean) in Panama. The occasion marks the launch of a five year, US$8 million environmental partnership which will establish the largest ever field experiment to help understand the impact of climate change on the world's forests.

The donation enables STRI to expand dramatically the existing research capability of its Center for Tropical Forest Science – the largest and longest-running tropical forest research network in the world – into a coordinated Global Earth Observatory system, increasing the quality of scientific data across 20 large-scale (up to 50 hectares or 120 acres in size) research plots in the forests of 17 countries. Several of these plots are each as large as 70 football pitches.

HSBC Group Chairman, Stephen Green announced the initiative – the largest ever corporate donation to STRI – during his first visit to Panama. Mr Green said: "We know the success of our business in the long term depends on a stable environment. We believe that by supporting this research we will more fully understand the risks and business opportunities presented by climate change and the Smithsonian Institute is the best-equipped and experienced organisation of this kind to help us understand how our global environment is changing."

Over five years, HSBC will support tropical forest research, beginning in the Panama Canal in order to:

1. Introduce carbon measurement in the existing research plots, for the first time creating global measures to illustrate the role tropical forests play in carbon storage;
2. For the first time compare the changes in tropical and temperate forests on a large scale and with standardised methods, in the process monitoring some three million trees representing approximately 8,000 species (more than 10 times the number of tree species in all of Europe and North America combined); and
3. Create the largest ever field experiment on the role of forests in regulating the quality and quantity of water flow in the Panama Canal, the most important watershed for world commerce.

Dr. Ira Rubinoff, Director of STRI, said: "The Smithsonian has studied tropical forests in Panama for nearly one hundred years. The new Global Earth Observatories are based on the longest running standardised forest monitoring programme, covering all the major tropical rainforest areas of the world. HSBC's donation will enable the Smithsonian to deliver key scientific data in the hands of decision makers responsible for global carbon policy and the water management of the Panama Canal."

The funds will also enable additional partnerships with the Smithsonian Environmental Research Center in Maryland, the Smithsonian Conservation and Research Center in Virginia and the Harvard Forest of the Arnold Arboretum in Massachusetts to establish research plots in countries outside the tropics, strengthening comparative data and serving as centres where students and the public can learn about tropical forest diversity and its relevance to the sustainability of the planet.

Joseph Salterio, Chief Executive Officer, HSBC Bank (Panama) said: "HSBC has operated in Latin America since 1970, and we are now the number one bank in Panama and one of the region's largest financial services organisations. This project is critical to Panama. The Canal is the lifeblood of the country and we know this economic engine could be threatened by changing rainfall patterns. The Canal supports a large amount of international trade and therefore is vital to international commerce."

Media queries to:

Nhan Chiem
HSBC Holdings plc
+44 (0)20 7991 0639
nhanchiem@hsbc.com

Elisabeth King
Smithsonian Tropical Research Institute
+1 202 786 2094 (Ext. 8216)
kingb@si.edu

Notes to editors:

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HSBC Holdings plc
HSBC Holdings plc serves over 125 million customers worldwide through some 9,500 offices in 76 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$1,502 billion at 31 December 2005, HSBC is one of the world's largest banking and financial services organizations. HSBC is marketed worldwide as 'the world's local bank'. It was recently named FT Sustainable Bank of the Year 2006 in recognition of its leadership in merging social, environmental and business objectives. It is also leading the way in its response to the threat of climate change, according to a report issued by the Carbon Disclosure Project (CDP). HSBC took top spot in the Banks and Diversified Financials Sector of the CDP's latest 'Climate Leadership Index'.

The Smithsonian Tropical Research Institute
The Smithsonian Tropical Research Institute (STRI), a unit of the Smithsonian Institution headquartered in Panama City, Panama, furthers our understanding of tropical nature and its importance to human welfare, trains students to conduct research in the tropics and promotes conservation by increasing public awareness of the beauty and importance of tropical ecosystems.
www.stri.org