HSBC – Best Bank for Sustainable Finance in the Middle East

Sustainability is one of HSBC’s global core strategic pillars and we have made ambitious commitments to financing the transition for our clients through sustainable finance solutions, financed emissions reductions, and supported our customers in transitioning. We offer sustainable finance across all of our products and our strategy is supported across three pillars: Transitioning Industry, Catalysing the New Economy, and Decarbonising Supply Chains.

In 2023/2024 we supported Middle East clients across the value chain, across industries, and across the entire real economy in their climate transitions with sustainable finance product offerings. We have financed specific projects and clients in the transition space, as well as being the go-to bank for creating and developing frameworks, transition plans, and other innovations across the Region.

We have led the MENAT region across sustainable finance products, participating in over 30 Green, Social, Sustainability, and Sustainability-Linked (GSSS) bond deals from MENA issuers, acting as GSSS Structuring Agents in 14 of them. We have also supported the development of the regional sustainable financing market via our participation in developing industry standards that are critical to both MENA and globally.

In 2023, we acted as the sustainable structuring agent for leading issuers, including DP World, Mubadala’s Mamoura Diversified Global Holding (MDGH), Masraf Al Rayan, and Emirates NBD. This resulted in a number of notable, inaugural GSSS transactions including Neom Green Hydrogen’s USD6.1 billion multi tranche non-recourse debt facility, including a Euler Hermes-supported tranche, where we were coordinator, bookrunner, and MLA. We were also the Sole ESG Structurer, Joint Lead Manager and Joint Bookrunner on DP World’s USD1.5 billion Inaugural Green Sukuk due September 2033.

On the equity side we have been instrumental in supporting Middle Eastern companies on their ESG positioning – including on strategy, disclosures and governance, to meet the evolving expectations of investors and equity capital markets prior to listing. In 2023, we were the sole bank leading the ESG workstream of both the ADNOC Gas and SAL IPOs:

We are also a leading bank for both sustainable and sustainability-linked loans. Our notable transactions included Apparel Group’s USD124 million sustainability-linked loan that will support increasing BCI sourced cotton for its in-house brand, as well as increasing gender equality across the group, improving its energy savings and reducing CO2 emissions.

Our sustainability-linked loan for Al Wathba National Insurance incentivizes its customers’ adoption of green products such as electric vehicles and green building-related premiums. This loan was the first sustainability-linked loan provided to an insurance company across HSBC’s global commercial banking business.

Our commitment to catalysing the new economy can be seen globally through the rollout of HSBC Innovation Banking. In the Middle East, we have also launched Venture Equity and Venture Debt (in the UAE only for now) products aimed at growing the new economy. Our Venture Capital offering is a new division within the bank that specifically looks to invest in the innovators of the future, including clean technology companies in the sustainability solutions space, whilst Venture Debt is facilitated through our Commercial Banking teams.

Over the past year we have entered into a partnership with Global Ventures (GV), a UAE-based venture capital firm investing in emerging founders building companies across Africa and the Middle East, with a focus on supply chain tech, sustainability/ climate tech and agritech. We expanded our venture debt offering to early-stage startups through our Innovation Banking division and aim to deploy USD100 million in the Middle East. We are investing in early-stage climate technology and financial technology companies via our Venture Capital offering. Our ClimaTech Venture Capital strategy invests in early-stage companies focused on the transition to a net zero economy. We have made two investments in AgriTech in the Middle East.

HSBC is one of the world's largest facilitators of sustainable trade and capital movements across borders, particularly in key corridors that connect the Middle East to the rest of the world. On the flow side, we have been supporting clients’ efforts to decarbonize their supply chains. We have been at the forefront of this development, sitting on the board of the International Chamber of Commerce's Standards for Sustainable Trade and Sustainable Trade Finance, which issued its second wave of recommendations at COP28 in Dubai in 2023. In 2023 we completed numerous sustainable trade deals nearly doubling the number of deals done in 2022. Notable themes being renewable projects, electric vehicles, and wastewater management.

We have completed several transactions that allow for increased decarbonisation of supply chains in the region. These include the USD2.5 billion green term loan facility for the Etihad Rail Stage 2 Freight Rail project. The project has significant positive environmental benefits, resulting in an estimated 65% reduction in CO2 emissions by 2030, compared to road transportation.

We also undertook the USD24 million green trade finance deal with SEPCOIII for export loans supporting the Taweelah Reverse Osmosis desalination project in Abu Dhabi, assisting the company with its focus on mastering core technology power, sea water treatment, and low-carbon energy in the field of high-tech environmental protection.

In June 2023 we launched our Sustainable Business Accelerator programme in the Middle East in partnership with Diginex, a Hong Kong-based tech start-up. Diginex's platform helps companies collect, certify and disclose their ESG data against key international frameworks and standards. This partnership was developed to support our customers with tracking and reporting their ESG performance. So far, this programme has enabled 133 people from 91 companies across the region to start their sustainability journey.

Perhaps the biggest catalyst for sustainable finance in the Middle East in 2023 was COP28 in Dubai. We embraced the opportunity to work with corporates, governments, and regulators across the region as they looked to mobilize finance, transition away from carbon-intensive industrial practices, build the new economy, and decarbonise supply chains. And we did this across all products, from capital markets and banking, through commercial banking, trade finance and payments.