Sustainability for business in China

Green Loans have characteristics aligned with the four pillars of the Green Loan Principles. The key pillar is that loans are made available to fully or partially finance/re-finance new or existing eligible Green Projects. These include, but are not limited to, renewable projects, green buildings, clean transport and energy efficiency.

Sustainability Linked Loans (SLLs) are aimed at supporting the borrower’s transition to a low-carbon economy through encouraging achievement of borrower’s sustainability goals. SLLs should comply with the five core pillars of the LMA’s Sustainability Linked Loan Principles (SLLPs).

Green Trade Finance is a proposition where a trade finance facility is made available to exclusively fund environmentally sustainable trade activities and adhering to the Green Loan Principles (“GLPs”), covering Trade Loans, Receivable Finance, Imports and Exports Finance, Commodity Trade Finance, with recourse Bank/Commercial Acceptance Draft Discounting, etc.*

Referring Green Loan Principles  and UN’s Sustainable Development Goals, HSBC has therefore developed an in-house methodology to support the client’s  sustainable activities that demonstrate clear environmental and/or social benefits. i.e. Sustainable Trade Instrument Principles (“STIPs”). The solution covers Guarantee, Documentary Credit (“DC”), Standby DC and Bank Acceptance Draft (“BAD”), etc*.

Sustainable Supply Chain Finance is a proposition where HSBC can make early payments to customer’s suppliers on terms that take into account the suppliers’ sustainability performance with the tiered pricing methodology. It aims to service the client needs of ensuring sustainable sourcing and reducing the carbon footprint within their supply chain.

Sustainability Linked Lending for Trade, referring Sustainability Linked Loans Principles (“SLLPs”) , are aimed at supporting the borrower’s transition to the low carbon economy, establishing ESG linked key performance indicators (KPIs) and Sustainability Performance Targets (“SPTs”), based on the performance of which, the pricing of the underlying trade facility will change. The underlying trade products cover funded trade finance (e.g. trade loans, receivables finance, etc.) and contingent trade products (e.g.Guarantee/DC/Standby DC/BAD issuance, etc.)*

Green Bonds are funded with proceeds allocated towards environmental projects, such as renewable energy, energy efficiency (such as energy storage, smart grids), pollution prevention and control, etc.

Sustainability Linked Bonds are KPI-linked, with bond characteristics varying depending on whether the issuer achieves pre-defined Sustainability Performance Targets (SPTs) e.g., Scope 1,2,3 targets or % of waste reduction.