HSBC launches sustainable financing options for small and medium businesses

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TORONTO – HSBC is bringing a suite of sustainable financing tools to Canada that the bank says will help small and medium-sized businesses meet growing expectations for environmental commitments.

Large companies and institutions are increasingly assessing the sustainability performance of their supply chains to meet their own green goals, said Alan Turner, head of commercial banking at HSBC Bank Canada, so small businesses must also to prove.

“There is a need for small businesses to be able to demonstrate that they are aligned with what large corporate institutions have defined as their position,” said Turner.

The products HSBC announced on Tuesday include green deposits, which make a company’s cash reserves available to support green projects, sustainable financing tools around trade and equipment, and a general loan with a rate of interest is linked to environmental objectives.

Turner says they contrast with green bonds and green loans, which have focused on government loans and large corporations.

Multinational banks like Standard Chartered PLC and Citigroup Inc., as well as several US banks have launched green deposits in recent years, but HSBC says they are the first to bring the option to Canada.

BMO is also active in sustainable finance, having launched its first sustainability loan in 2019 under an agreement with Maple Leaf Foods. Earlier this year, he announced a green loan for Atlantic Packaging that aligns with a set of standards for the space known as the Green Loan Principles.

Sustainability in the financial services industry is evolving rapidly as products such as green loans become more standardized and a growing number of banks commit to reducing the environmental impacts of their operations and loan portfolios.

In April, the industry-led, UN-convened Net-Zero Banking Alliance was launched with 57 banks committed to aligning their lending and investment portfolios with net zero issuance by 2050.

Vancity and HSBC were the only banks operating in Canada that initially signed the alliance, although last year the Toronto-Dominion Bank, the Royal Bank of Canada, the Bank of Montreal and more recently the Canadian Imperial Bank of Commerce had created their own network. zero commitments by 2050.

This report by The Canadian Press was first published on September 28, 2021.


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