As the global economy shifts towards sustainability, the role of banks and financial institutions has never been more critical. In Bangladesh, where industries are rapidly evolving, HSBC is stepping up to drive sustainable transition through innovative financial products. By facilitating access to sustainable capital, HSBC is helping businesses meet environmental, social, and governance (ESG) goals along with ensuring long-term economic resilience.
From financing renewable energy projects to promoting social equity, sustainable finance is unlocking new growth opportunities. Financial institutions are structuring solutions that incentivize businesses to adopt sustainable practices while reducing their carbon footprint. To support businesses in their sustainability journeys, HSBC is offering a range of sustainable financial instruments tailored to different sectors and objectives:
• Green Loans: These loans finance or refinance environmentally friendly projects such as renewable energy, environment friendly buildings, clean transportation, and energy efficiency initiatives.
• Social Loans: Aimed at financing essential services like healthcare, education, and affordable housing, social loans empower businesses that drive socioeconomic advancement.
• Sustainability-Linked Loans (SLLs): Unlike traditional loans, SLLS incentivize businesses to achieve measurable sustainability targets-such as reducing greenhouse gas emissions or improving gender equality-by offering financial benefits for meeting these objectives.
• Sustainability-Linked Trade Finance: This facility supports businesses engaged in sustainable supply chains by linking trade finance to predefined sustainability goals, thereby encouraging responsible sourcing and eco-friendly trade practices.
• Green Trade Finance: Providing working capital for businesses involved in environmentally sustainable trade activities, this facility ensures that environment friendly procurement, renewable energy supply, and low-carbon trading become mainstream.
Below are some of the major sustainability-linked deals executed by HSBC:
1. Square Group: In 2020, Square Group secured a $118 million Sustainability-Linked Loan to expand its renewable energy initiatives, setting a benchmark for industrial sustainability.
2. DBL Group: Sustainability Linked Loan favoring DBL Group to connect cost of capital directory to gender equality (in line with SDG 5 - Gender Equality) and greenhouse gas.
3. Ha-Meem Group: A $160 million sustainability-linked loan provided to Ha-meem Group to further support their journey to sustainability through greenhouse gas reduction, water conservation, and organic raw material sourcing.
HSBC will continue to play a pivotal role in bridging capital and sustainability as businesses face increasing regulatory and consumer demand to adopt sustainable practices.
The Bank has won multiple awards globally in regard to Sustainable Finance, notable of which are the Euromon- ey 2022 World's Best Bank for Sustainable Finance, Asia's Best Bank for Sustainable Finance, Middle East's Best Bank for Sustainable Finance, Western Europe's Best Bank for Sustainable Finance.
HSBC is also currently partnering with Apparel Impact Institute regionally to produce a report on opportunities to finance decarbonization in Bangladesh's Apparel and Textile Industries. The report aims to contribute to the global discussion on the issues of financing decarbonization in the industry and to spur local and international action and highlight the opportunities that can be unlocked through policy, financial and technical solutions to accelerate economic and environmental impacts.
