ESG Score Change: Panama Papers shine spotlight on HSBC
The Panama Papers Scandal broke earlier this week, putting HSBC’s questionable banking practices in the spotlight again. HSBC is accused of abetting wealthy individuals in financial crimes such as money laundering and tax evasion. HSBC’s Corporate Governance Score has slipped below that of Barclays, a major competitor not yet affected by the scandal. Of course, their positions could reverse again as the scandal unfolds.
Both companies have been associated with tax evasion and money laundering in the past. Their Corporate Governance scores took a dive last November when Barclays was fined for not properly screening for financial crimes of wealthy clients. Meanwhile, the whistle-blower of HSBC’s long-running tax evasion scandal, was convicted of financial espionage by Swiss courts. In 2012, in the midst of that scandal, HSBC admitted to laundering proceeds from drug trafficking and provided banking services to those in sanctioned countries such as Iran.