HSBC Expands Sustainable Finance Product Suite for Canadian Businesses

HSBC Bank Canada launched five new sustainable finance tools for commercial and global banking clients, including green deposits, green trade finance, green revolving credit facilities, sustainability-linked loans and green equipment financing. These new offerings will join HSBC’s green loans program, which launched in 2019.

“HSBC is the first bank in Canada to make such a comprehensive suite of options available for Canadian companies to take action on sustainability,” Alan Turner, head of commercial banking for HSBC Bank Canada, said. “Much of the focus to date has been on the large corporate and institutional markets. With these new tools, support for companies to achieve their sustainability goals is no longer the preserve of big businesses. Tools are now available for small and medium-sized businesses too.”

Green Deposits

Through HSBC’s green deposits offering, businesses can now include sustainability in their treasury activities with overnight saving and term investment options in both Canadian and U.S. dollars. Deposits will be eligible to finance loans for customers’ green initiatives, such as renewable energy, energy efficiency and biodiversity conservation, providing a way for companies to support environmentally-beneficial projects. Clients will receive a quarterly portfolio-level view of how their funds have been deployed to support green projects, and they will be able to manage their green account like a regular deposit account.

Sustainable Trade Finance

Combining HSBC’s expertise in both sustainable and trade finance, the sustainable trade finance offering will have a range of applications that can be particularly helpful for Canadian businesses trading internationally. The offering will support environmentally and socially sustainable trade activities throughout the trade cycle, from the tender process and issuance of a payment order through to shipment and sales fulfilment, all aligned to green loan principles.

Green Revolving Credit Facilities

HSBC first began offering green loans in 2019 and has built on the product to offer green revolving credit facilities, which will enable companies to access funds when required according to their cash flow needs, with a minimum loan value of $500,000.

Sustainability-Linked Loans

Canadian businesses can now tie their borrowing costs to their progress on achieving sustainability goals with HSBC’s sustainability-linked loans. With this type of loan, the interest rate is tied to a company’s achievement of key sustainability performance targets, which may include greenhouse gas emissions reduction, increased use of renewable energy, greater diversion of waste from landfills and reduced water use, as well as social and governance metrics like increased workforce diversity. This product has been available to select clients since March 2019, and is now being rolled out more broadly across all HSBC commercial banking clients.

Green Equipment Financing

Green equipment finance, or green leasing, will support companies in financing the acquisition of equipment with tangible environmental benefits in alignment with the market standard Green Loan Principles.

Dedicated Guidance for Canadian Businesses

HSBC Bank Canada recently created a dedicated sustainable finance advisory unit. This capability allows HSBC to share practical and global knowledge on how companies can obtain support to bring their sustainability objectives to life.

“Virtually every customer today wants to talk about ESG. We know from experience small and medium-sized businesses have a difficult time justifying sustainability spending,” Angie Hall, head of sustainable finance at HSBC, said. “These products will make it easier for Main Street and mid-market businesses to start on their sustainability journey.”

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