When HSBC India joined hands with the ministry of science & technology and the ministry of earth sciences last week to set up the Earth Sciences Forum to address climate change challenges, it was not a one-off initiative by the bank. HSBC's other climate change initiatives include HSBC Climate Partnership, HSBC Climate Confidence Index, HSBC Global Environment Efficiency Programme, HSBC Global Climate Change Benchmark Index and HSBC Climate Change Fund. The Earth Sciences Forum plans to set up a leadership council, organise awareness workshops for industries, encourage sharing of best practices on adaptation and mitigation, and disseminate information to facilitate an informed response to climate change issues. Naina Lal Kidwai, group general manager and country head, HSBC India, spoke to FE's Rajiv Tikoo about the initiative and the bank's role in it. Excerpts: Why did you set up the Earth Sciences Forum? It was a chance meeting with the minister (Kapil Sibal) on a flight that led us to talk on climate change issues and the need to create a platform for public-private partnership for coping with the challenges. Why did you choose to partner with the government and not industry? The ministry is an enabler. You see, the raw material for the agenda has to come from the ministry. But it's not an exclusive forum. It's wide open for anyone who wants to engage with others on the issue.We are setting up a leadership council from a wider spectrum of stakeholders like industry, NGOs, academia and the government to guide the forum. How easy or difficult is it to work with the government for a professional bank like yours? It's always tougher when you work together in a joint venture than when you go on your own. At the same time I believe that two plus two can make five. Otherwise, it just remains as two and two. We bring in some strengths to this partnership. So does the ministry. The fact that the two of us are so different and yet focused on the same agenda gives us a unique opportunity to leverage our strengths for a common purpose. Does your partnership with the Indian government also mean that you are endorsing its position that the first and foremost responsibility of tackling climate change rests with rich countries? Oh, no. It is not for us to take a position. Irrespective of what we stand for, there are little things that we can do as human beings. In fact, you can make money by doing it. For example, you can save on water or energy by being more efficient. You may spend more money on the equipment you install in the first place, but in the long run you actually save money. You can bring in money through carbon credits. You can access the HSBC Climate Change Fund. It's about bringing together all financial and technological tools that are available and then letting industry take the decision. HSBC has launched quite a few initiatives on climate change. Why are you so much proactive? We have always worked on environmental and educational issues. We have worked on projects ranging from protecting Olive Ridley turtles and supporting botanical gardens to undertaking water harvesting with NGOs. Besides, we thought there is a broader climate change agenda that needs to be taken up. Since we are one of the largest banks, we set up the HSBC Climate Partnership, HSBC Climate Change HSBC Benchmark Index, HSBC Climate Change Fund and HSBC Climate Change Benchmark Index, which help to promote best practices. What is the Climate Change Benchmark Index about? It tracks the Companies that are seen as working in an environment friendly manner. Why are they important? By doing that, we find, their shares do the best in the long-run. So, if we demonstrate to others that the Companies that follow the best environmental standards are the ones that are rewarded in the long-run, then it engineers the right kind of behaviour. So, these are all ways of creating that change agenda. I think this is where the bank felt that it has a role. At the county level, we do what we want to do in terms of water and energy conservation. At the global level, we bring in the best governance standards and principles. Do you look at these initiatives from a business or corporate social responsibility angle? Both. The company that uses resources efficiently is going to prosper in the long-run. More than often, it will be profitable, too. The two agendas have a common end. How are you embedding such thinking in your operations? It's still new. It's up to country CEOs to set up the agenda. We are a truly local bank. But there must be some corporate guidelines that you can adopt to suit the local needs? That is there, but the implementation is up to us. We are expected to abide by the sprit. It's not so cut and dry. For example, everyone is not polluting. There may be a company that has acquired another company that is polluting. So, do you stop lending to that company because of its acquisition? In fact, the parent company's standards may be high. So, it will take them time to implement their standards in the company they have acquired. Would you fund an environmentally irresponsible company knowingly? Our intention is to avoid funding environmental offenders. If a company is polluting and not showing any demonstrable interest to check it, we would like to move away. If a company agrees to check it, I would rather work with it to help it change than let it go. All things being equal, would you prefer to lend to a green business? It's not an either or situation. Well, we would like to lend to a company that is responsible. At the same time, we would not like to lend to a company that has the cleanest technology, but is killing people. Does your sales force actively scout for responsible businesses? We seek such Companies actively. We do go out and look for businesses from the wind and solar space. We even support some Companies with equity from climate change fund and access to carbon credits. Would you consider offering lower rates of interest to green businesses? It's something that we are looking at, but it hasn't yet really reached that stage. At the end of the day, does it make good business sense for you as a bank? I have no doubt about it. For example, if I lend to you, tomorrow you have a problem and your cost of operation is higher or your plant is shutting down, then it's not good business for me. Our future is linked very firmly with that of the client company. When you enter into relationship with a banker, it's not a one-off deal. It's for the lifetime of the company. So, if something makes that company more sustainable, more profitable and more secure, it's got to be good for us. By and large, the best performing firms also happen to be those that are environmentally secure. Do you lose business by putting a premium on responsible behaviour when others don't? Our business doesn't get much affected because we are a fast-growing bank. It's not a huge issue for us, but I think it's painful that everyone is not following responsible practices. Somewhere along the line, all of us should be looking at similar principles. We have raised it at various forums, but it's for industry to pick up good practices by itself. Finally, what is HSBC doing itself? Fortunately, banks are not the most polluting businesses. We measure our carbon footprint and do whatever we can do to bring it down or offset it. We are carbon neutral. At HSBC, these initiatives seem to be institutionalised and not CEO-led as is the case usually. How do you feel? I am lucky that I work for an organisation that feels for the issues that are dear to me. We are firmly aligned.