The US division of HSBC Holdings PLC has begun offering sustainability-related lending to its commercial bank clients, entering a growing market that finances the increasingly ambitious environmental, social and governance goals of corporations.
HSBC Bank USA said late Wednesday that loan terms will be linked to predefined sustainability targets and companies that achieve those targets will pay lower interest rates. Loans comply with the Sustainable Loan Principles established by the loan market associations.
Debt supporting goals such as reducing greenhouse gas emissions, using renewable energies, saving water and diversifying the workforce has increased as companies work to attract investors and comply with growing regulations. Borrowers are often able to obtain stability linked loans with interest rates below normal market rates.
ESG-related loans reached nearly $ 96.3 billion in the first quarter of 2021, up from nearly $ 34.4 billion in the first quarter of last year, according to Dealogic.
“We want to provide loans and access to credit in a way that meets the needs of American businesses, from financing growth and investment to supporting their sustainability strategy,” said Julie Bennett, head of ESG HSBC America.
Email Dieter Holger at email@example.com; @dieterholger