Last year was an important one for sustainable finance in the Middle East. Dubai hosted the COP28 conference, following on from Sharm El-Sheikh in Egypt in 2022. This has well and truly put the spotlight on sustainable finance for banks, corporates and sovereigns in the region.
It is in this exciting environment for growth that HSBC stands out as the clear winner of Euromoney’s best bank for sustainable finance in the Middle East this year. Stephen Moss is the regional chief executive.
First and foremost, the numbers. The bank saw 61% overall growth in its total sustainable finance business in 2023, compared with 2022.
This was primarily driven by green bonds and loans. Green bond volumes rose from $380 million in 2022 to $1.44 billion in 2023. Green loans and green qualified lending grew by 300% over the same period.
The focus has not just been on environmental finance: social lending by the bank reached a new high of $39 million in 2023, from just $4 million in 2022.
The approach to the region, where the oil and gas industry dominates everything, has been to engage clients. The bank has embedded sustainability into its commercial banking business to help clients transition not just their own operations but also in their value chains. This has driven much of the sustainable finance growth over the review period.
Issuers such as Al Rajhi Bank and Dubai Islamic Bank brought their first green and sustainable sukuks to market, giving environmental, social and governance matters greater prominence in the Middle East. HSBC acted on all MENA ESG sukuk transactions in 2023 – an impressive achievement.
The HSBC team also led on some of the most innovative deals in sustainable finance in the region, including DP World’s $1.5 billion inaugural 10-year green sukuk in September – the first of its kind in the shipping and ports industry. The bank acted as sole ESG structurer, joint lead manager and joint bookrunner.
HSBC acted on all MENA ESG sukuk transactions in 2023 – an impressive achievement
The bank also acted as the sole ESG structuring agent on several IPOs in the review period, including Adnoc Gas’ landmark $2.5 billion IPO in Abu Dhabi and SAL’s $678 million IPO in Saudi Arabia.
In August 2023, HSBC closed the first ESG key performance indicator-linked FX deal in the MENAT region, booked and coordinated by the bank’s UAE-based markets team for a real estate investment trust listed on the Istanbul stock exchange’s sustainability index.
The bank has also been active in initiatives in the region to ensure the market’s integrity as it grows. It has a seat on 18 industry working groups and is one of nine founding members (and the only bank member) of the Global Climate Finance Centre (GCFC), which was launched at COP28.
GCFC is a UAE-based think tank and research hub to connect public and private stakeholders to build an enabling environment for accelerating climate finance and developing best practices.
