Green Growth Brings Opportunities for Business
HSBC Asia Pacific Head of Corporate Sustainability
After the global economic and financial crisis, the importance of running a sustainable business for the long term has become more vital today than ever. As the world’s first carbon neutral bank, HSBC has placed “Sustainable Finance” at the core of its business strategy by managing sustainability risks while seeking business opportunities.
While HSBC actively seeks opportunities to participate in low carbon, energy financing opportunities, we will continue to support fossil fuels, including coal, oil and gas within the boundaries of the Equator Principles, greenhouse gas emission regulations and our own sector-specific risk policies.
The transition to low-carbon growth brings many opportunities for business. In 2008, the global carbon market was worth $116 billion and this figure has doubled in 12 months. According to the global research from HSBC, electricity demand is expected to increase 45 percent from 2006 level to 2030 and a $2.5 trillion worth of investment in renewable power generation will be required through 2030. The business sector and financial institutions should adapt their business model to tap on the significant business potential.
Between 2004 and 2009, the HSBC Climate Change Benchmark Index, which tracks the performance of 377 companies that are making significant profits from climate change-related services, outperformed global equities by 46 percent.
The data shows that despite a turbulent market, climate change investment remains not only valid, but companies that are strongly committed to tackling climate change are already seeing the most growth.
HSBC has supported customers through green project financing. In the past 18 months, it has been involved in many renewable transactions as lead arranger or advisor with much success in the U.K. and Spain, and opportunities in China and India are growing strongly.
Our insurance brokers service has also developed environmental liability insurance, climate risk consulting and renewable energy project insurance. To encourage customers in the Pearl River Delta region to operate in a more eco-friendly manner, HSBC introduced an industry-first Green Equipment Financing product as early as 2007. Customers can enjoy benefits if the financed equipment meets environmental protection assessment criteria.
Innovation and customer focus are key to HSBC’s long-term competitiveness in today’s carbon-constrained world. Therefore, we developed products and initiatives encouraging our customers and the public to take active part in leading a greener lifestyle to contribute to a greener world.
We also influence customers’ behaviour to lead a greener lifestyle by pioneering the Asia’s first green credit card ? made from PET-G a chlorine-free material, customers receive e-statements and rewards for buying green products.
Looking ahead, HSBC will continue to look at commercially viable research, finance and investment opportunities. Apart from sustainable business development, the bank will work with the environmental partners to also identify future trends, and help customers and the community to better integrate the climate change risks while at the same time capturing the opportunities associated with the transition to a low carbon economy.
More and more people are expecting stronger actions addressing climate change in particular from governments as the global talks aimed at reaching a climate change deal draws closer.
Government leadership and its policy play an important role to shape business development opportunity driven from low-carbon energy technologies and infrastructure.
The South Korean government is doing a fine work to invest 107 trillion won ($87 billion), about 2 percent of their GDP, which is twice the amount recommended by the U.N., to promote green growth and develop renewable energies. Its success requires strong commitment, a new language of action and mindset change.
Green finance is a core enabler of sustainability. If companies want to be committed to sustainability or green growth, they should have the necessary expertise, practical tools and financial solution to achieve the strategies.
The ongoing challenges will also be to address the expectations and priorities of various stakeholders on business practices which are under increasing scrutiny at both the national and international level.