"We passionately believe that by doing things the right way, banks can be powerful contributors to economic progress in societies."
Peter Sands Group Chief Executive
The last few years have been testament to Standard Chartered’s unwavering commitment to sustainability. Through the financial crisis and changing political and regulatory environments we have stood firm in our commitment to building a sustainable business as a bank, delivering value to our customers and shareholders whilst contributing to the communities in which we live and work.
In 2010, we lent more, making a vital contribution to economic growth; we continued to place our sustainability agenda at the core of the way we do business; we stepped up our efforts to measure our impact on markets where we operate; and we invested more in our communities.
The launch of Here for good as our new brand promise was a key moment for Standard Chartered in 2010. It captures the essence of what makes us different, what makes us special. Here for good resonated immediately with both our clients and customers, and our staff; it is how we have done business for over 150 years across Asia, Africa and the Middle East.
We passionately believe that by doing things the right way, banks can be powerful contributors to economic progress in societies. Standard Chartered aims to have a positive impact in three ways: by contributing to the real economy; by promoting sustainable finance; and by leading the way in our communities.
The outlook for the global economy remains fragile. While there are encouraging signs of recovery, particularly in Asia, global macroeconomic imbalances persist, and the West continues to struggle with debt, deflation and deleveraging. Unemployment is still stubbornly high across many parts of the world. The emerging economies need to ensure that their growth is sustainable and inclusive.
In this environment, questions continue to be asked about the role of banks in society and how best to reform the financial sector to facilitate growth and job creation. As a bank, we acknowledge that we have a part to play in restoring public trust in the financial system – keeping credit flowing and demonstrating the positive impact that banks can have on economies.
In 2010, we increased lending to our customers and clients by around USD45 billion. In particular, we increased our lending to small and medium-sized enterprises (SMEs), a key driver of growth and job creation, to nearly USD18 billion, up 32 per cent on 2009. We provided thousands more people with the opportunity to buy their own homes, increasing mortgage lending by USD13 billion, or 23 per cent, across our footprint.
We take our impact on the broader economy very seriously. While our goal is to create superior value for our shareholders, we must achieve this by making positive and sustained contributions to the economy and society as a whole. To help understand our social and economic impact in our markets we commissioned a series of independent studies starting with Ghana and Indonesia. These studies highlighted the important contribution we make through our core business of banking.
In Ghana, we help finance exports and support large-scale projects such as the Jubilee Oilfields that are set to transform the economic prospects of the country. But our impact goes far beyond the provision of credit. For example, we were first in Ghana to offer commodity, interest rate and currency hedging to clients, helping companies to manage their risks more efficiently.
One of the most effective ways that we can contribute positively to developing economies is through financial inclusion. Many people across our markets have no access to finance or even basic banking services. Since 2006, we have provided more than USD720 million in finance to 70 microfinance institutions across 17 countries – impacting the lives of around 4.8 million people and far exceeding our USD500 million commitment under the Clinton Global Initiative (CGI).
Many businesses in developing markets still struggle to secure trade finance, a serious constraint on economic growth. As one of the world’s leading trade banks, we play a crucial role in supporting our clients and helping to ease credit provision. In 2010, we continued to work with the International Finance Corporation (IFC), part of the World Bank Group, signing a USD1 billion unfunded risk participation agreement to boost trade finance across Asia, Africa and the Middle East. Our USD1.25 billion commitment under the IFC Global Trade Liquidity Programme, signed in 2009, has helped facilitate more than 6,000 exports and imports in emerging markets, providing vital trade finance to more than 3,000 SMEs.
Well-run banks that understand and actively manage their risks are vital to supporting trade, investment, growth and job creation. Regulators and politicians continue to reform the global banking system to prevent a repeat of the financial crisis. We support the drive for better regulation and governance, but believe this needs to be balanced to secure sustainable growth in the global economy. A safe and resilient banking system is in everyone’s interest. Enforcing structural changes that are likely to damage growth and endanger financial stability benefits no one.
As an international bank, we play a crucial role in sustainable economic development by helping our clients manage their risks in an ever-more volatile world. By making markets in commodities and financial instruments, we help our clients trade, invest and create wealth more broadly in society. Despite continuing to attract much criticism, derivatives are a vital tool and can add real social value. For example, many of our SME clients in Hong Kong depend on currency derivatives to trade across borders, a crucial activity for Hong Kong’s economy. Meanwhile, in one of our major African markets we provide the government with crude oil derivatives that help smooth the cost of essential fuel imports.
Water, food and energy security continue to affect the health and prosperity of millions of people across our markets. Unpredictable and extreme weather conditions cost lives and hinder vital development. But by providing finance effectively and responsibly we can have a positive impact and help to instrument change. This means managing the environmental, social and governance risks in the projects we finance. It also means balancing complex factors and differing stakeholder feedback to judge inevitable trade-offs in deciding what we should support.
In 2010, we integrated our Position Statements and long-standing commitment to the Equator Principles on responsible project financing further into our processes and added a 14th position statement on water. We also progressed on our commitment to make finance available for environmental solutions. So far, we have reached almost USD5 billion of our CGI commitment to mobilise USD8 billion to USD10 billion of financing towards clean technology and renewable energy projects.
As we see it, promoting sustainable finance is about more than acknowledging our licence to operate; it’s about recognising that we can do more than make money for our shareholders – that we can create broader social and economic value by doing things the right way.
In 2010, we kept our promise not to let the financial crisis divert us from our commitments to our global community investment programmes. Through Seeing is Believing, we have reached almost 80 per cent of our CGI pledge to raise USD20 million for tackling avoidable blindness, reaching 20 million people by 2014. We have also met our CGI commitment to educate one million people on HIV and AIDS by March 2010. In fact, by the end of 2010 we had exceeded that target by 60 per cent.
Goal, our initiative to use sport, life skills and financial education to transform the lives of underprivileged girls in developing countries, now spans China, India, Jordan and Nigeria. In 2010, the programme reached 12,000 girls. Meanwhile, Nets for Life, our joint campaign to distribute long-lasting insecticide treated nets across 15 African countries, distributed over 3.7 million nets, a giant step towards our 2013 target of 5 million.
The energy and passion of our staff, their commitment to contributing to the communities where they live and work, is a powerful force for good. In 2010, we set an ambitious target of 27,000 volunteering days. In response, our employees volunteered more than 49,000 days, an increase in volunteering leave of 315% over 2009. But it’s not just about community activities; the enthusiasm of our staff, their determination to be agents of change, runs right through our core businesses; it’s how we continue to deliver on our promise to be Here for good.
In this report, we set out our 2010 performance, guided by the Global Reporting Initiative reporting framework as well as our own stretching targets and commitments.
We’re proud of what we achieved in 2010, proud of where we’re going. We have a clear and consistent strategy to be the best international bank, leading the way in Asia, Africa and the Middle East; we have a distinctive culture with strong, shared values; and we remain committed to building a sustainable business, creating long-term value for our shareholders, working in partnership with our clients and customers, and having a positive social and economic impact in the communities where we live and work.
Group Chief Executive