HSBC and Barclays throw weight behind green finance projects

by

The two banks made separate climate announcements today (Source: Getty)

HSBC and Barclays added their weight to the growing area of green finance today, with separate commitments to environmentally friendly schemes.

HSBC today said it will provide $100bn in sustainable financing and investment by 2025, with support for “clean energy and lower-carbon technologies”.

Unveiling a series of measures on the environment, HSBC announced it will source all of its electricity from renewable sources by 2030, while it will stop financing new coal-fired power plants in developed markets only.

Read more: Green bonds could provide sustainable funding for long-term investments

Meanwhile, Barclays this afternoon announced it has successfully issued the first green bond from a UK bank backed by British assets. The proceeds will be used to finance mortgages on English and Welsh residential mortgages in the 15 per cent of properties with the highest energy efficiency.

The €500m (£441m) transaction was almost four times oversubscribed with a €1.85bn order book, reflecting “very strong demand”, Barclays said.

Demand for green finance has increased in recent years as political pressure and increased awareness of the dangers of climate change have pushed the environment up the agenda, although the election of US President Donald Trump a year ago has been a major setback in international efforts to promote a sustainable economy.

According to the Climate Bonds Initiative, a charity which promotes green bonds, $94bn (£72bn) has been raised so far over the course of 2017. Some 40 green bonds are listed on the London Stock Exchange.

Bank of England governor Mark Carney has made an environmentally friendly financial sector a priority, saying last year that “green investment represents a “major opportunity for both long-term investors and macroeconomic policymakers seeking to jump-start growth”.

Read more: Final G20 communique splits Trump from other leaders on climate change

Stuart Gulliver, HSBC chief executive, said today’s announcements reflect “the scale of the challenge in making a transition to a low-carbon future.”

Barclays’ finance director Tushar Morzaria said the green bond issuance will “help us diversify our investor base, attracting interest from the growing group of environmental, social and governance (ESG) investors.”

The move by Barclays could help to spur the growth of the green bond market in the UK, according to Sean Kidney, founder and chief executive of the Climate Bonds Initiative.

He said: “The UK green bond market has been slow to develop, lagging many G20 and EU nations. This new Barclays green bond should trigger more global banks and FTSE companies to act and initiate their own green bond programmes into 2018.”

Read more: Aviva, Jupiter and Royal London demand banks address climate change