- Understanding ESG
Collaboration is Key
Mastering a path is key to realizing the value of sustainable finance and we have identified two main drivers - new policies and access to financial architecture - that provide a reliable, creative and voluminous stream of funds to transform energy transition blueprints into reality.
We believe that only transparent and collaborative efforts between all parties involved – notably financial institutions (FI), industry, government and academia – will ensure smooth travels on the much-needed journey towards a healthier and more prosperous planet. And very importantly, energy security for all.
Creative, committed and world-leading: these best describe HSBC’s approach to sustainable finance in the Middle East and wider region. We are building our reputation as the leading bank for sustainable finance, by providing the market with sustainable loans and advisory services across the lines of business and industries. The array of products and collaborations in the Middle East, a global pioneer in the energy transition, are rapidly growing (see: Progress Report). For example, thematic investment funds known as ‘Electric Revolution’ and ‘Clean Living’ that have been developed by HSBC Private Banking are now available to HBME clients. We also have an internal sustainable finance agenda that has created two lower carbon funds that are both available in the Middle East: Global Lower Carbon Equity and Global Lower Carbon Bond. Both are registered with the UAE Federal Securities and Commodities Authority.
As we enter the largely unexplored territory of green growth, limitless potential awaits sustainable finance. Working together will enable all to safely, efficiently and innovatively break through new intellectual and geographic boundaries; a collective win-win.
Sustainable Finance Pillar
HSBC is a leading global partner to the public and private sectors in the transition to a low carbon economy. We have made significant progress on our 5 global sustainable finance commitments (as part of our Sustainable Finance pillar) in 2018:
- Provide $100 billion of sustainable financing and investment by 2025: $28.5bn achieved in 2018
- Provide 100% electricity from renewable sources by 2030, 90% by 2025; 29% achieved in 2018
- Reduce exposure to thermal coal and manage transition for high carbon sectors: New energy policy effectively ends new coal, tar sands and Arctic oil financing
- Adopt recommendations of Task Force on Climate-related Financial Disclosures (TCFD): Global assessment of our exposure, reporting and disclosure
- Lead and shape the debate around sustainable finance: 25 reports published in HSBC’s Centre of Sustainable Finance, the bank’s new thought leadership center
GARETH THOMAS, Regional Head of Global Banking, Middle East, North Africa and Turkey (MENAT), HSBC
HSBC Progress Report
Middle East, North Africa & Turkey
The HBME Climate Business Council (CBC) was established in February 2018 to bring together leaders across HBME and from all jurisdictions to ensure the bank meets its sustainable finance targets, develops a strategy for this region and responds to client needs. And the Sustainable Finance Growth Accelerator was established in January 2019, chaired by the Head of Global Banking, to spearhead a key focus for this genre of funding for growth in HBME.
HBME was amongst the first signatories to the Dubai Declaration for Sustainable Finance, an Initiative from the Ministry of Climate Change and Environment (MOCCAE). In December 2018, HBME hosted over 30 representatives of the finance community and MOCCAE to discuss new innovations in sustainable finance.
In January 2019, HBME was a signatory to the Abu Dhabi Sustainable Finance Declaration, along with 24 other public and private sector entities. HBME will provide support to the Central Bank of the UAE, the Securities and Commodities Authority and the Abu Dhabi Global Markets (ADGM) on facilitating investment flows towards sustainable and green outcomes.
The C3 Accelerator Program was launched in September 2018 as an open invitation to entrepreneurs making a positive social impact across the Middle East. Twenty finalists were selected and provided a week of training with impact investors from the social enterprise world at HBME headquarters in Dubai. The program ended with a pitch competition, encompassing senior experts from Facebook, Amazon, Google, MBC, Bain & Co, MasterCard, Careem, MAF, GE, Lazard, IFC, Expo 2020 Dubai and Mubadala.
Sharakah and HBME signed a pact to support SMEs in Oman in January 2019 to provide support for sustainability integration for ten small and medium-sized enterprises (SMEs) – an integral and rapidly growing part of the sultanate’s workforce.
HBME has played an active role in capability development on sustainability and sustainable finance for Saudi Arabian British Bank(SABB), of which it owns a 40% stake, since June 2018.
HBME in Egypt signed a collaborative agreement in December last year to help SMEs get access to EGP400 million ($23mn) in leasing and low interest financing services throughout 2019. The collaboration supports initiatives by the government and the Central Bank of Egypt (CBE) to boost the SME sector; widely regarded as the backbone of the country’s economy.
Staff training for 367 HBME professionals was conducted last year. This included relationship managers, directors and department heads trained on sustainable finance in the UAE, Egypt, Oman, Kuwait, Bahrain, Qatar and Saudi Arabia.
HSBC supported 158 shareholder resolutions on environmental and social issues last year and voted at more than 7,000 company meetings at a global level.
HSBC globally engaged on ESG issues with 1,219 companies, in 58 countries – nearly 30% of the countries worldwide.