Another variant of green finance is through a certificate of deposit, as shown by a move involving HSBC with a new product launch.

HSBC has launched a new tranche of green certificates of deposit for a global asset manager. This follows the bank’s debut green retail certificates of deposit in Hong Kong issued last December.

Denominated in Hong Kong dollars, the Green CD was issued to Invesco Hong Kong in February 2020 with a fixed coupon of 2.05 per cent per annum for six months, HSBC said in a statement earlier this week. Proceeds from the certificate of deposit will finance businesses and projects promoting a “low-carbon, climate resilient and sustainable economy”, it said.

The London/Hong Kong-listed bank is more than half-way to delivering $100 billion of sustainable financing and investment globally by 2025. It has delivered $52.4 billion so far.

A recent HSBC Sustainable Financing and Investing Report showed that in Hong Kong, 82 per cent of investors and 80 per cent of issuers say ESG factors are “very” or “somewhat” important to them. Over half of the territory’s investors equate ESG engagement with improved investment returns or reduced risks, which is mirrored by global and Asia-wide figures of 54 per cent and 58 per cent respectively. The 2019 report surveyed 175 issuers and 175 investors across Hong Kong, mainland China, Singapore, Indonesia, Malaysia and Thailand, on their changing attitudes to sustainability issues. 

Several Asian banks are pushing into the green debt and financing space. “Green bonds” – debt that is used to finance environmentally-vetted projects such as solar energy, are growing. Asian financial firms such as UOB and fellow Singaporean bank DBS have recently broadcast their work in this field, for example (see here and here). A cumulative $580 billion of green bonds were sold through 2018, according to Bloomberg New Energy Finance (source: Bloomberg, 24 March 2019). The market is predicted to keep rising as firms require finance to meet carbon reduction targets set by governments in certain parts of the world. Another recent player is Ping An of China Asset Management (Hong Kong).