Sustainable Financing

Financing a Sustainable Project

HSBC has been one of the leaders at the forefront of sustainable financing over the last few years and is consistently ranked as one of the top three leading global underwriters of Green, Social and Sustainability Bonds.

We also continue to play a pivotal role in the market’s overall development and our involvement as a key member of the Green Bond Principles Executive Committee remains a priority for the bank. HSBC chairs two of the five working groups (New Markets and Index & Database), and is an integral contributor to the Social Bond working group after being one of the founding writers of the Social Bond Guidance in June 2015. This guidance was adopted by the International Capital Markets Association as the Social Bond Principles in GBP Executive Committee in June 2016, and publicly released in June 2017.

Aligned to this, as one of the world’s leading Export Finance banks and a leading Project advisor to governments and sponsors around the world, we are able to gain deep insight into funding mechanisms, commercial structures and across sectors, providing a huge body of knowledge to apply to specific sustainable project situations.

HSBC Commitments to the Environment – Developments over Time

  • 2017
    Published standalone ESG update / Ranked #1 for climate change and SRI and Sustainability Research by institutional investors in Extel Survey / Appointed Global Head of Sustainable Finance and created the HSBC Centre of Sustainable Finance / Established Sustainable Finance hubs in Hong Kong, Paris, London, New York and Toronto
  • 2016       
    Launched the first Sovereign green bond for Poland DEC2016 / HSBC was founding writer of Social Bond Guidance, which became Social Bond Principles in JUN2016 / HSBC Bank (UK) Pension Scheme announced the transfer of GBP1.85 billion into a new fund that excludes companies which fail to meet minimum environmental standards, including relating to climate change / Improved disclosure of climate strategy and carbon emissions, e.g. received ‘A’ rating in the 2016 CDP / Joined Catalytic Finance Initiative, directing USD8 billion to sustainability projects / Received Green Climate Fund (accountable to UNFCCC) accreditation as an implementing entity / HSBC Water Programme totaled USD100m resulting in 60 local water projects
  • 2015
    USD1bn pledged for green, social or sustainable bonds / Issued first green bond via HSBC France / Trained 1000th sustainability leader / Additional USD150 million charitable donation to mark HSBC’s 150th anniversary / HSBC Global Asset Management signed up to Montreal Pledge / Signatory to World Economic Forum’s CEO Climate Leaders Group’s open letter
  • 2014       
    Introduced Equator Principles 3 / Signed three power purchase agreements with renewable energy generators in the UK and India, expected to provide nine percent of HSBC’s energy
  • 2013       
    Issued revised Forestry Policy, Agricultural Commodities Policy, and a World Heritage Sites and Ramsar Wetlands Policy / Adopted new green bond issuance principles / Won Rio BRT bid and worked with Embarq, the World Resources Institute programme for sustainable urban transport and planning, to research the environmental, social and economic impacts of BRT systems on cities
  • 2012       
    Led one of the largest project financings in Latin America in the renewables sector / Participated in the largest offshore wind project financing in the world, a 75-turbine offshore wind project in England / Structured finance transactions for 267 low-emission buses in Santiago, Chile, and 300 in Manaus, Brazil / Signed up to the UN’s Principles for Sustainable Insurance / New policy requires all Equity and Credit analysts to incorporate ESG into their fundamental research / Launched HSBC Water Programme
  • 2011       
    Established Sustainable Operations 2020 strategy / Reissued Energy Sector Policy, covering coal, oil sands and nuclear power stations / Completed sixth major financing for eco-bus system / HSBC and Earthwatch won International Green Award / Built Social Finance portfolio / Committed five more years of funding to Future First
  • 2010       
    Established Climate Business Council / Launched Group-wide paper sourcing policy / Led Equator Principles’ Governance Rules / Led largest fundraising in clean tech sector with USD125 million investment
  • 2009       
    Supported first project finance offshore wind farm
  • 2008       
    Set four-year targets for reducing energy, water, waste and carbon dioxide / HSBC represented for the first time at COP at Poznan
  • 2007       
    Launched ground-breaking USD100m HSBC Climate Partnership / Established Climate Change Centre of Excellence / Issued Mining and Metals Policy / Established Group Sustainability Department
  • 2006       
    Chaired Equator Principles and adopted version two of Equator Principles / Issued Energy Sector Policy / HSBC Global Asset Management signed up to the United Nations Principles for Responsible Investment / Launched Future First and Teach for All for disadvantaged children / Won Financial Times ‘Sustainable Bank of the Year’ Award
  • 2005       
    Issued Chemicals Policy and Freshwater Policy / Set three year environmental targets / Published first Sustainability Report (independently assured) / Arranged financing for the world’s largest eco-bus system
  • 2004       
    Launched Environmental Action Plan and issued Environmental Risk Strategy / Issued Forestry Sector Policy / Completed financing of two Scottish Wind Farms & first UK wind sector tax lease
  • 2003       
    Formed Corporate Responsibility Committee of HSBC Holdings plc Board / Adopted Equator Principles
  • 2002       
    Issued Sustainability Risk Standards
  • 2001       
    Launched USD50 million partnership ‘Investing in Nature’ with three leading conservation charities
  • 2000       
    Joined UN Global Compact

A selection of recent HSBC Sustainable transactions

DCM Green Bonds
1. TSKB USD300m Mar-27, first Sustainability/Green Tier 2 Bond
2. TenneT Holding EUR1bn Mar-24, first Green Hybrid Bond
3. ICBC Luxemburg EUR1.1bn & USD850m Oct – 20 & Oct – 22 first Belt and Road Climate Bond (Triple tranche)
4. Castle Peak Power Company Limited (CAPCO) USD500m Jul-27, first ‘Energy Transition Bond
5. KDB USD300m Jul-22, Green Bond, first Green Bond from Korean Development Bank
6. Anglian Water GBP250m Aug-25, first UK Water Utility Company Green Bond
7. QBE USD300m Oct-22, first Insurance Sector Green Bond
8.CDMX MXN1bn Dec-21, first Sub-sovereign Sustainable Bond
9. Mexico City Airport Trust USD4bn Jul-47, largest Corporate Green Bond
10. NWB EUR1.5bn Jun-24 & EUR500m Jun-32, largest ‘Affordable Housing’ Social Bond
11. NAB: EUR500m Sep-22, largest Australian Green Bond
12. Poland EUR750m Dec-21, first sovereign Green Bond

M&A

Abdul Latif Jameel's acquisition of FRV Group Sole FA to ALJ to acquire 100 per cent of Fotowatio Renewable Ventures ("FRV") a global solar developer. Deal size not disclosed. Apr 2015.
CDC Norfund acquisition of Globeleq Africa
HSBC acted as Financial Advisor to buyer. EV of USD750m. One of largest Africa inbound M&A deals of the year, closed Sep 2015.
Enel Green Power
Sole Financial Advisor for the acquisition of a majority stake in Bharat Light & Power (BLP), the Indian renewable energy (wind and solar) producer (170 MW installed capacity, 600 MW pipeline). Oct 2015.
Brookfield Infrastructure
Sale of Cross Sound Cable in US. Joint Financial Advisor to vendor in sale process. Aug 2015.

ECM

Saeta Yield IPO
EUR435 million Spanish Yieldco IPO. HSBC acted as Joint Bookrunner. 1st EUR denominated Yieldco IPO. Feb 2015.
China Singyes Solar Technologies CB
RMB930m debut convertible bond in Hong Kong. HSBC acted as joint bookrunner.
8point3 Energy IPO
HSBC acted as co-manager on USD420 million IPO for US Yieldco + arranger for holdco credit facilities. Joint Yieldco between SunPower and First Solar. HSBC also won the Payments and Cash Management mandate. Jun 2015.
Xinyi Solar equity placement
$148m equity top up placement in Hong Kong. HSBC acted as sole placing agent. Mar 2015

Project and Export Finance

Enel Green Power, South Africa - HSBC acted as Sole Mandated Lead Arranger for a EUR145 million facility financing the supply of solar panels for four photovoltaic power projects with a total capacity of 314 MW in South Africa.
The Desmi Project, Sri Lanka - HSBC financed a Danish project to increase the quality and the capacity of the dairy industry in Sri Lanka helping smallholders in rural areas to sell their milk. By modernising milk factories in three locations across the Island, HSBC is structuring financings to monetise receivables from Renewable Obligation Certificates (ROCs) that are awarded for each MWh of renewable energy produced by sustainable power generating companies.

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