HSBC injects $1bn into green bond portfolio

HSBC has become the latest bank to ramp up its commitment to sustainable business with the launch of a new $1bn green bond portfolio that will be used to fund projects in the renewable energy sector.

The bank has pledged to place the $1bn portfolio into ‘high-quality liquid assets’, forming green and sustainable bonds. The portfolio will cover a range of potential projects including renewable energy, energy efficiency, clean transportation and climate change adaptions.

Spencer Lake, HSBC’s global head of capital financing, explained: “HSBC is committed to the green bond market, is a founding member of the Green Bond Principles and has been extremely active in supporting our clients in issuing green bonds. HSBC understands that action to support the transition to a low carbon economy also brings social and economic benefits.

“We are building our business for the long term and over the last 10 years HSBC has developed its approach to climate change. The bank integrates climate policy, insight and education into the Group’s global businesses and operations. Sustainability underpins our strategic priorities and enables us to fulfil our purpose as an international bank and this is yet another commitment to evolving our sustainable business.”

The portfolio has been introduced as a means to advise clients on ways to focus on sustainable financing. The bonds will also incorporate SME financing in sectors such public transport, education and healthcare.

The new pledge strengthens HSBC’s commitment to the recently signed Montreal Carbon Pledge, which commits banks to measure and publically disclose carbon footprints of cliental and investment portfolios on an annual basis. The new portfolio will include the Green Bond Principles to ensure that clients receive access to important and transparent information when making investment decisions.

Green growth

Green bonds are a rapidly growing commodity as private companies and SMEs look to invest in sustainable projects and new innovations. According to ratings agency Standard and Poor’s a record $30bn of ‘green bonds’ could be issued this year.

Earlier this month, fellow banking giant Goldman Sachs announced it will leverage $150bn into clean energy financing and investments by 2025 as it aims to become the first US investment bank to be carbon-neutral across its operations.

Banks are also looking to promote sustainability through other means, with the Royal Bank of Scotland announcing that eight eco-innovations will be trialled at its world headquarters in Gogarburn as part of an innovation sponsorship programme.

The Co-operative Bank has also undergone measures that have led to reductions in waste and water use; while it sourced 99% of its electricity from renewable energy offsetting 100,000 tonnes of CO2 as a result.

Matt Mace

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