HSBC Singapore has introduced a new financing product designed to help small and medium-sized enterprises (SMEs) improve their sustainability performance.
The HSBC Sustainability Improvement Loan links the interest rate of the loan to the sustainability rating of the borrower as assessed by EcoVadis.
This incentivizes companies to improve their environmental, social and governance (ESG) practices by offering lower interest rates for better sustainability scores.
Conversely, if a borrower’s sustainability score declines, interest rates may rise.
EcoVadis assesses companies’ performance across four key areas: environment, labor and human rights, ethics, and sustainable sourcing.
This financing is designed to be available to companies in the early stages of their sustainability journey.
This addresses the challenges many SMEs face in accessing traditional sustainability-related financing due to limited resources to measure and report ESG performance.
HSBC has also launched several other initiatives to support companies in their sustainability transition.
This includes: HSBC Sustainability Trackera collaboration with Univers that provides free online tools to help assess your environmental impact, and real-time energy and carbon consumption data.
To further support small businesses, HSBC is providing knowledge support and expertise to the Small Business Sector Net Zero Transition Programme, offering workshops, training and a business support network.
This loan is also available in the UK, Hong Kong and the Middle East.
Priya Kini, Head of Commercial Banking at HSBC Singapore, said:
“We find that many SMEs in Singapore continue to face barriers to decarbonization compared to larger companies, which have dedicated resources and a wider range of financing solutions to decarbonize. We know. The new HSBC Sustainability Loan aims to close the gap by improving access to financing solutions for businesses, enabling them to take their first steps towards net zero transition. HSBC is now able to offer a wide range of financing solutions and sustainability transition tools to support Singaporean businesses throughout their corporate lifecycle.”
Featured image credit: Edited from freepic
