JAKARTA (Reuters) - Environmental group Greenpeace International on Tuesday slammed HSBC Holdings Plc for allegedly funding palm oil companies in Indonesia that it says have destroyed tropical rainforests.

An aerial view of a palm oil plantation is seen during the haze in Indonesia's Riau province June 28, 2013. REUTERS/Beawiharta

HSBC and other banks lent to palm oil companies that are “responsible for unacceptable activities”, Greenpeace said in a report, highlighting loans worth hundreds of millions of dollars given out by the London-based bank since 2012 to six companies allegedly responsible for deforestation in Indonesia.

The report, which also alleges violations of labor laws and operating licenses, follows a trend of increasing pressure being brought to bear by green groups on corporations in Europe to clean up their supply chains in countries such as Indonesia and Malaysia.

“By providing financing without proper diligence on sustainability, banks enable the palm oil sector’s destructive practices to continue,” the green group added.

HSBC said its policies call for sustainable and legal practices.

“HSBC’s policies prohibit the financing of operations that are illegal, damage high-conservation value forest... or violate the rights of workers and local people,” the bank said in an emailed statement.

“We are not aware of any current instances where customers are alleged to be operating outside our policy and where we have not taken, or are not taking, appropriate action,” the bank added.

Indonesia is the world’s biggest producer of palm oil, an edible oil used in a range of products from chocolate to soap. Environmentalists say millions of hectares of forests have been cleared to make way for plantations, often by smallholder farmers using slash-and-burn methods that blanket the region in haze every year.

“(HSBC) claims its policies ‘prohibit the finance of deforestation’, although many companies that it funds are destroying forests,” Greenpeace added.

Greenpeace urged HSBC, Europe’s biggest bank, to step up due diligence on clients and not rely on standards set by the Roundtable on Sustainable Palm Oil (RSPO).

RSPO has recently come under fire from environmentalists for its poor handling of complaints against members, prompting groups such as Nestle to step up their own checks on suppliers.

The industry body has also been criticized for weak enforcement of sustainability standards and workers’ human rights.