Meet HSBC's Sustainability Czar

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When you're in charge of sustainability for a megabank with 6,100 offices in 72 countries, you look for the most bang for the buck. So don't get William Thomas started on eliminating paper cups.

"In early stages it is easy to go chase coffee cups, but the money, time and brainpower wasted on those kinds of activities is silly compared to big problems in energy," said Thomas, the head of sustainability in HSBC's technology and services arm. "You can eliminate every paper coffee cup and it won't make a material difference to your carbon footprint."

By contrast, data centers consume 2% of the world's energy, equivalent to air travel.

"The thing that scares me the most is I don't know where this data processing in the cloud and energy efficiency is going," said Thomas, whose job is to make sure all of the bank's buildings, data centers, purchasing and back office operations meet sustainability standards.

"It will keep growing and get better, but while we are OK at predicting average, it's hard to predict on an exponential curve, and we are in the age of the great accelerations — in population, computing, energy usage, food — everything is on that curve."

For Thomas, who moved into the job in 2009 after a background in IT at the bank, sustainability is a constantly evolving mission. The early targets — energy, waste, paper and employee involvement such as reduced air travel — have mostly been achieved. Some of the next steps will require a different approach. HSBC tried building a wind farm in India; that was a failure.

"You have to learn from your mistakes. We didn't know how to do it, so we found experts and now we buy renewable energy, which might be solar in India, wind in the U.K. and a mixture in the U.S."

The bank has become proficient at designing energy-efficient new buildings and retrofitting older structures to meet a rigorous set of standards.

When HSBC opened its North American headquarters in the northern Chicago suburb of Mettawa in 2008, the new building generated national publicity for its sustainable design. (The company has since moved the headquarters to New York.)

Housing approximately 3,100 employees, its H design, with an east and west wing, brought natural light to 70% of the building, which was designed according to LEED gold standards for sustainability.

"We have LEED built into our standards — even if we don't go for LEED certification; it's great as a tool," Thomas said. HSBC built the first LEED building in Africa — its headquarters in Egypt — and the first in Canada, in Vancouver.

The LEED sustainability measures HSBC incorporates in its large buildings include automated monitoring and management of lighting, heating and cooling, and recycling, including for electronic waste and water conservation such as low-flow faucets and toilets. Buildings are also designed to make use of natural lighting with office and conference rooms at the core of floors rather than on perimeter walls.

"We make the building more efficient to operate in the future and provide a better working environment for employees. That is the lead reason — we want to provide a good working atmosphere for employees. It also saves money in operations and it is doing the right thing."

The bank makes extensive use of teleconferencing to reduce air travel, which has held steady or even declined slightly, although Thomas notes some travel is still required to accommodate clients who want to meet their bankers face-to-face. The bank also welcomes more use of remote working by employees to reduce energy-consuming commutes.

HSBC has been pursuing a "take care of the environment" agenda for quite a long time, well before it was out in the public, Thomas said.

"In the last five to six years it has become much more focused; our overall objective is to help create a low carbon economy" through its internal practices, its lending, and philanthropy aimed at environmental efforts, especially around water.

HSBC works with its consultants and partners such as HP, Intel and Microsoft to improve data center efficiency.

"Microsoft is a big partner. They run lots and lots of very large data centers, and some of their efficiencies are amazing."

Thomas also credits Intel with helping the bank develop its sustainability program.

"When we started, we weren't sure what the first step was, so we went to a supply chain partner, Intel, who is really good at it," Thomas said. "They helped us write our first sustainability plan, and they didn't charge us. Since then we have repaid that favor 50 times over to other organizations, and that's how everybody gets better. We don't consider sustainability a competitive advantage; we have trained people in other banks in how to do it."

Intel runs an annual sustainability leadership summit bringing together executives from its top suppliers, government officials, leading NGOs, the media, and academics to share information on best practices in sustainability. The technology company is the largest buyer of renewable energy on the planet, Thomas said. Intel says a new generation of processors boosted performance by 40% while saving energy, and the company has a new LEED-certified design center in Israel.

HSBC is constantly updating its data centers to replace older air handling equipment and UPS (uninterruptible power supply) systems with new, more efficient versions and updating PCs and servers on a regular schedule to take advantage of the IT industry's constant improvement of more processing power with less energy consumption.

The bank also monitors its supply chain partners for their sustainability practices and offers them assistance in improving their operations.

Thomas takes both a big view of global climate change and a bank-specific view — many financial centers are located close to rivers and oceans.

"Climate change affects our customers, our investments, and where our employees work," said Thomas. "A lot of our employees are right next to oceans. Hurricane Sandy clobbered us in New York, and we will get a lot more of those. Because of the carbon emissions we put into the atmosphere, storms will be bigger and last longer. Our job is to try to keep it from getting worse. As businesses, we have to lead this effort because governments are on four-year election cycles."

The big wins in energy improvement are controlled by the corporate real estate office, he said.

"We targeted them right away so they would know what to do," Thomas said. "In most organizations, the low-hanging fruit for improving sustainability is in corporate real estate."

It's the bank's business to understand climate change and sustainability, he said.

"Our goal is to be good stewards. The other reason is that it protects our brand, and if we do a good job we save a lot of money through more efficient buildings, data centers and less paper." Sustainable building design also benefits employees with more natural light and a better working environment.

Tom Groenfeldt is a freelance writer in Sturgeon Bay, Wis., who specializes in writing about financial technology.

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