HSBC 2015 Annual Report Download - page 100

Report of the Directors: Other information (continued)
Carbon dioxide emissions / Property / Footnotes
HSBC HOLDINGS PLC
98
considers conduct and compliance-related matters relevant
to remuneration. The reports of these committees may be
found on pages 270 to 273.
An overview of our conduct framework is set out in page 41.
The management of conduct of business and the steps taken
to raise standards and deal with historical incidents are
described on page 178.
‘Regulatory focus on conduct of business and financial crime’
is one of the Group’s top and emerging risks which is
discussed on page 112.
Total conduct-related costs within significant items were
$2.4bn, a decrease of $1.3bn compared with 2014.
Provisions raised in 2015 resulted from the on-going
consequences of a small number of significant historical
events.
Operating expenses included significant items related to
conduct matters of $2.4bn, including $1.8bn in respect of
legal proceedings and regulatory matters, of which $0.2bn
related to regulatory matters in our private banking
operations and $1.6bn was in respect of settlements and
provisions in connection with legal matters. These are
discussed in Note 40 on the Financial Statements.
Customer remediation costs charged to operating expenses
included $0.5bn in respect of the mis-selling of payment
protection insurance (‘PPI’). Cumulative PPI provisions made
since the Judicial Review ruling in the first half of 2011
totalled $4.7bn, of which $3.6bn had been paid as at
31 December 2015 (see Note 29 on the Financial
Statements).
Carbon dioxide emissions
HSBC’s carbon dioxide emissions are calculated on
the basis of the energy used in our buildings and
employee business travel from over 28 countries
(covering about 91% of our operations by FTE).
The data, gathered on energy consumption and distance
travelled, are converted to carbon dioxide emissions using
conversion factors from the following sources, if available, in
order of preference:
1. electricity attribute certificates or equivalent instruments;
2. contracts for electricity, such as Power Purchase
Agreements;
3. supplier/utility emission rates;
4. residual mix (sub-national or national);
5. other grid-average emission factors (sub-national or
national); and
6. for other types of energy than electricity and travel, if no
specific factors can be obtained, we use the latest
available factors provided by the UK Department for
Environment, Food and Rural Affairs and/or the
Department of Energy and Climate Change in the UK.
This is the market-based methodology recommended by the
revised guidelines of the Greenhouse Gas Protocol for 2015
disclosure onwards.
To incorporate all of the operations over which we have
financial (management) control, the calculated carbon
dioxide emissions are scaled up on the basis of the FTE
coverage rate to account for any missing data (typically
less than 10% of FTEs). In addition, emission uplift rates
are applied to allow for uncertainty on the quality and
coverage of emission measurement and estimation. The
rates are 4% for electricity, 10% for other energy and 6% for
business travel, based on the Intergovernmental Panel on
Climate Change Good Practice Guidance and Uncertainty
Management in National Greenhouse Gas Inventories, and
our internal analysis of data coverage and quality.
Carbon dioxide emissions in tonnes
2015 201450
Total 771,000 795,000
From energy 662,000 676,000
From travel 109,000 119,000
Carbon dioxide emissions in tonnes per FTE
2015 201450
Total 2.97 3.08
From energy 2.54 2.62
From travel 0.42 0.46
For footnote, see page 99.
Our greenhouse gas reporting year runs from October
to September. For the year from 1 October 2014 to
30 September 2015, carbon dioxide emissions from our
global operations were 771,000 tonnes.
Independent assurance of our carbon dioxide emissions
will be available in the first half of 2016 on our website.
Property
At 31 December 2015, we operated from some 6,860
operational properties worldwide.
Approximately 1,840 were located in Europe, 1,760 in Asia,
430 in North America, 2,590 in Latin America and 240 in
Middle East and North Africa. These properties had an area
of approximately 51.9m square feet (2014: 54.3m square
feet).
Our freehold and long leasehold properties, together with
all our leasehold land in Hong Kong, were valued in 2015.
The value of these properties was $11.3bn (2014: $10.8bn)
in excess of their carrying amount in the consolidated
balance sheet on an historical cost based measure.
In addition, properties with a net book value of $1.4bn
(2014: $1.6bn) were held for investment purposes.
Our operational properties are stated at cost, being
historical cost or fair value at the date of transition to IFRSs
(their deemed cost) less any impairment losses, and are
depreciated on a basis calculated to write off the assets
over their estimated useful lives. Properties owned as a
consequence of an acquisition are recognised initially at
fair value.