HSBC UK launches £500m green fund with cashback incentive for smaller firms

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This is the first loan for SMEs offering 1 percent cashback for green activities in the UK, says the bank. This  follows its global commitment to provide between USD750 billion and USD1 trillion of financing and investment to support clients over the next decade.

Small and medium-sized enterprises are increasingly being described as the ‘new front’ in the battle against climate change.

The new £500m fund is available for businesses with a turnover of less than £25m and will offer the cashback on loans, starting from £1,000 to help the businesses invest in green activities.

To qualify for the cashback, evidence will be required that the use of the loan proceeds meet HSBC’s Eligible Criteria for Green Activities, which have been independently reviewed by Sustainalytics.

HSBC UK is also launching a Sustainability Assessment Tool that provides actionable insights and resources to help businesses transition to net zero. 

Speaking from COP26, HSBC UK chief executive Ian Stuart said: 

“Companies of all sizes and sectors have a role to play in the journey to net zero, however the sustainable finance market has been predominantly focused on larger corporations. It’s critical that access to funds isn’t a barrier for small and medium sized businesses working to achieve lower carbon emissions.

“We want to help businesses seize the opportunities and growth potential that environmental sustainability offers. 

“The fund, along with our new and expanding suite of tools and resources, will make it easier for small businesses to take practical steps to cut their emissions and help their customers to cut theirs too.”

New research from HSBC UK has found that despite half of businesses feeling pressure from customers, government and the media, just 23 per cent are measuring environmental metrics.  

While a quarter of small businesses want to play their part, believing that a focus on environmental sustainability will grow their business in the next 12 months, they told the bank that cost is a key barrier. HSBC UK says it wants to help remove the barriers small businesses face in the drive to transition to a lower carbon economy.

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The Green SME fund and the Sustainability Assessment Tool are the latest additions to HSBC UK’s sector offering and green product range which includes: a dedicated sustainable finance team, 500 sustainability ambassadors around the UK, Green SME Fund, Green Term Loans, sustainability linked loans, green revolving credit facilities, green ssset finance, deposits, trade finance and green and sustainability linked bonds Sustainability Hub.

Client David Luke Schoolwear, a Manchester-based school uniform provider, has installed over 1,000 solar panels with support from a HSBC UK Green Loan to reduce carbon emissions and cut costs. A six-figure funding package was used to install 1,700 sq metres of ERS solar panels at its headquarters in central Manchester.

This gives the business the capacity to generate a peak solar array of 295kw-h onsite, enabling a 25-tonne reduction in carbon emissions every year. Over a 25 year solar-lifespan, David Luke Schoolwear is expecting to save up to 3,600 tonnes in carbon emissions.

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