Besides this, HSBC recently launched an ESG Academy in Hong Kong to support and guide companies and the broader business community in their sustainability journeys. HSBC has also formed ESGenies, a team with ESG-related certifications to assist customers with sustainable finance-related arrangements.
Lenders are also undertaking awards to motivate SMEs to capture green financing opportunities, such as the HSBC Living Business Awards,7 which assess the overall sustainability performance of SMEs.
In addition, HSBC launched the GBA Sustainability Fund in May 2022, committing US$5 billion in sustainable financing for companies of all sizes in the region. It covers a wide range of projects from pollution prevention to clean transport to wastewater management. As well as financing, applicants will also have access to a suite of resources including free ESG training sessions and assessment tools to help businesses understand how they can reduce emissions and operate more sustainably.
From a financing perspective, proceeds from a green bond or loan must be used to finance green, social, or sustainable assets or projects. Other approaches, such as sustainability linked bonds, embed sustainability targets into the financing structure with a transparent mechanism to see how the targets are being met but, unlike green bonds or loans, proceeds can be used for general corporate purposes. Additionally, banks that want to help small businesses develop their ESG initiatives can make loan assessments more ESG and SME-friendly by taking other metrics into consideration, such as whether reputable private equity or venture capital firms are backing the company, and taking a more forward looking approach to assessing the financial performance – particularly if substantial cash has already been raised from a supportive investor base to fund future growth.
As a trusted partner, HSBC provides clients with a wide range of sustainable financing solutions that can help them reduce their overall emissions. This can include embedding sustainability targets in the financial products or setting ESG-related conditions on usage of the funds.
Beyond help with funding to achieve sustainability ambitions, small businesses need the engagement of governments, regulators, individuals and of course, larger companies.
"Everyone has to evolve right across the board,” Thomas said. “Regulators, businesses, and banks with some of the most traditional business models have a real responsibility to evolve as well. These initiatives are some of the ways we're trying to move forward, take that risk, and provide that capital to SMEs."
Today, we and many of our customers contribute to greenhouse gas emissions. We have a strategy to reduce our own emissions and to help our customers reduce theirs. Find out more about our climate strategy