HSBC has dominated the environmental, social and governance (ESG) space for many years, and nowhere is that more evident than in the Middle East. There are many reasons why it deserves to be named the region’s best bank for sustainable finance.
First, it is the clear league-table leader, ranked number one in the awards period across all green, social and sustainability bonds.
Second, it is always the chosen coordinator, bookrunner, arranger or adviser when governments, financial institutions and corporates get busy in the sustainability space. HSBC was joint ESG structuring bank and joint ESG coordinator on Etihad Airways’ $1.2 billion sustainability-linked revolver in October 2021, the largest offering of its kind in the carrier’s history; and on Gulf International Bank’s debut $625 million sustainability-linked facility, completed the same month.
Third, it is the top of the food chain in the space, advising governments as they transition to cleaner, greener economies. HSBC is one of only a handful of banks with a dedicated head of climate change and with a 30-strong team that can have that high-level conversation with clients. That makes it a trusted partner to regional governments. A case in point: it is the only bank advising Dubai’s government on its climate-change plan.
“The focus on sustainable finance is evident around the region, not only because we have consecutive global climate summits being hosted here – COP27 is in Egypt this year and COP28 will be in the UAE in 2023 – but more fundamentally because the long-term economic transformation agendas that governments are pursuing have diversification away from oil and gas at their core,” says Diako Makhmalbaf, director of ESG solutions, global banking at HSBC in the Middle East, north Africa and Turkey (MENAT).
As they transition out of oil and gas, regional corporates are rushing to issue ESG-themed bonds and loans, with HSBC on hand to help. It helped Riyad Bank print its first ever additional tier-1 sustainability sukuk, a perpetual 5.5-year issue that raised $750 million. For Saudi National Bank it was sole ESG structuring agent on its $750 million five-year inaugural sustainable sukuk – a deal that was 4.3 times oversubscribed.
Two other standout transactions were Arab Petroleum’s $750 million five-year green bond, an inaugural print for the Saudi energy firm, with proceeds earmarked for renewable energy projects, pollution prevention and control, and green buildings. HSBC was joint lead manager and joint bookrunner on the offering. It was also joint lead manager and joint bookrunner on Sweihan PV Power’s $700 million 144a/RegS green project bond, which attracted $1.3 billion in orders from more than 70 global accounts.
Sustainability is still an emerging theme and HSBC is careful to ensure that bonds, loans and other offerings adhere to the highest levels of international scrutiny. Everything that gets issued is scrutinized first by internal governance committees and then by PwC to ensure it is a ‘green’ product.
The long-term economic transformation agendas that governments are pursuing have diversification away from oil and gas at their core
Diako Makhmalbaf
And the award also recognizes that the bank has made sustainability central across all parameters and platforms. On the private wealth side of the business, ESG wealth assets under management jumped to $49 million in March 2022, against $29 million a year earlier, while its green retail lending book expanded sevenfold to $51.2 million.
In microfinance, HSBC is a key provider of capital and institutional support. It helped Cairo-based Reefy Microfinance to raise E£250 million ($13.4 million) through a revolving credit facility, as part of the Central Bank of Egypt’s plans to improve economic and financial empowerment by supporting women-owned smaller enterprises.
“Being named the Middle East’s best bank for sustainable finance for the fourth straight year shows our commitment, action and continued innovation in supporting clients on their journeys to net zero,” says Gareth Thomas, MENAT head of global banking.
