HSBC pledges $1bn to boost climate technology startups

HSBC has established a goal of allocating up to $1trn to sustainable finance by 2030.

This funding will support emerging companies focused on a range of solutions, including electric vehicle (EV) charging, battery storage, sustainable food and agriculture, as well as technologies for carbon removal.

HSBC’s global commercial banking chief executive officer Barry O’Byrne said: “Access to finance is critical for early-stage climate tech companies to create and scale real world solutions.

“We are already working with some of the most exciting companies at the forefront of climate tech, from seed to global scale-up. With HSBC’s global reach, in-house climate tech expertise, and newly launched Innovation Banking proposition, we can offer these pioneer companies unrivalled support.”

This funding initiative extends the impact of HSBC Asset Management’s Climate Tech Venture Capital strategy, which aims to provide clients with global investment prospects in technology startups that tackle climate change issues across sectors like energy, transportation, insurance, agriculture, and supply chain.

Research demonstrates that venture capital funding for climate startups dropped by 40% in the first half of 2023, due to market conditions in the venture capital space which have put pressure on technological valuations.

Nevertheless, according to estimates from the International Energy Agency (IEA), nearly half of the emissions reductions required to achieve net-zero emissions by 2050 will rely on technologies currently in the demonstration or prototype phase.

HSBC’s climate technology initiative aims to accelerate the adoption of these crucial technologies.

Tracking climate action efforts

So far, HSBC has allocated $100m for investment in Breakthrough Energy Catalyst. This investment is intended to fund the decarbonisation of high-carbon industries by supporting four climate technologies including direct air capture, clean hydrogen, long-duration energy storage, and sustainable aviation fuel (SAF).

However, the banking sector continues to face criticism for its financial support of fossil fuels.

Over the past seven years, global banks have collectively channelled more than $5.5trn into the fossil fuel sector.

Last year, HSBC confirmed that it will no longer be providing lending or capital markets finance specifically for activities relating to the development of new oil and gas fields.

Moreover, earlier this year, the bank joined the World Bank’s Private Sector Investment Lab, which is focused on expanding financial support for renewable energy and associated infrastructure projects.