Credit & Lending

Sustainable Facilities

You need strategies and solutions to help you navigate an uncharted environment

HSBC has made commitments to contribute to a sustainable economy around the world by becoming a zero-emissions bank. Sustainable finance is any form of financial service that integrates environmental, social and governance (ESG) criteria into business or investment decisions.

Green facilities

Green facilities allow our customers to meet their sustainable agendas, by actively attributing funds to green projects and building customer profiles within the Green Finance market.

Green Loans currently references Term Lending and Revolving Loan products (for more details regarding loans please follow the link) that have characteristics aligned with the four components of the GLP (Green Loan Principles).

The green label can be applied to Trade Loans, Imports and Exports when meeting 4 pillars of the GLP (more details about Trade products can be found here).

In order the facility complies the “Green” definition the use of proceed of the facility should be met with one of the following Categories:

1. Renewable Energy

Production and transmission of energy
Appliances & products associated with renewable assets
2. Energy efficiency

New and re-fitting of existing buildings with assets like:
Energy storage; District heating; Smart grids
3. Green Buildings

Need to meet Regional, National or Internationally recognised standards or certifications, such as:
LEED (Gold/Platinum); BREEAM (Good/Very Good); HQE (Excellent); CASBEE
4. Eco-Efficient and/or Circular Economy

Adapted products; production technologies & processes
Development of environmentally friendlier products (eco-label or environmental certification), resource-efficient packaging/distribution
5. Clean Transportation

Electric, Hybrid, Public, Rail, Non-motorised, and Multi-modal transportation
Infrastructure for clean energy vehicles and reduction of harmful
6. Sustainable management of living and natural resources

Environmentally Sustainable fishery and aquaculture
Environmentally Sustainable forestry, including afforestation and reforestation
Preservation or restoration of natural landscapes
7. Sustainable management of land use

Environmentally Sustainable agriculture and animal husbandry
Climate smart farm inputs / Precision agriculture such as biological crop protection or drip-irrigation
8. Terrestrial and aquatic biodiversity conservation

Includes the protection of coastal, marine and watershed environments
9. Climate change adaptation

Includes information support systems, such as climate observation and early warning systems
10. Pollution prevention and control

Reduction of air emissions & greenhouse gas control
Soil remediation
11. Waste management

Waste prevention, reduction and recycling
Energy/emission-efficient waste to energy
Products from waste and remanufacturing and associated environmental monitoring
12. Sustainable water and wastewater management

Sustainable infrastructure for clean/drinking water, wastewater treatment, urban draining systems & river training
Flooding mitigation e.g. flood defense systems, porous pavements

Sustainability-linked facilities

An ESG/KPI Margin-Linked Loan is where the margin is set to vary according to the borrower’s performance. This can be linked to any of these measures: One or several ESG (environmental, social, governance) criteria; Other sustainability Key Performance Indicators (KPIs); The Borrowers’ own Sustainability Performance Targets (SPTs).

This represents a material enhancement that we propose on the 2 lending products “Term Loans” (including bi-laterals and syndications) and “Revolving Loans”.

Sustainable trade instruments refer to the guarantees, letters of credit, or standby letters of credit issued under a sustainable trade facility made available to exclusively facilitate environmentally and/or socially sustainable economic activities.

ESG criteria involve:

A. Environmental Categories

Renewable Energy - Increases in the amount of renewable energy generated or used by the Borrower
Green House Gas (GHG) Emissions - Reductions in GHG emissions in relation to products manufactured or sold by the Borrower, or to the production or manufacturing cycle
Energy Efficiency - Improvements in the energy efficiency rating of buildings and / or machinery owned or leased by the Borrower
Biodiversity - Improvements in conservation and protection of biodiversity, and contribution to biodiversity
Water Consumption - Water savings made by the Borrower
Waste Disposal - Reductions in liquid and solid waste disposals in relation to products manufactured by the Borrower or to the production or manufacturing cycle
Circular economy - Increases in recycling rates or use of recycled raw materials/supplies. Achievements of zero-waste in production plants
Sustainable Sourcing - Increases in the use of verified sustainable raw materials / supplies
Sustainable Farming and Food - Improvements in sourcing/producing sustainable products and/or quality products (using appropriate labels or certifications)

B. Social Categories

Human Rights and Community Relations - Improvements in the Borrower’s management of the relationship between businesses and the communities in which they operate, including, but not limited to, management of direct & indirect impacts on core human rights and the treatment of indigenous people. More specifically, such management may cover socio-economic community impacts, community engagement, environmental justice, cultivation of local workforces, impact on local businesses, license to operate, and environmental/social impact assessments
Affordable Housing - Increases in the number of affordable housing units developed by the Borrower
Data Security - Reduction in the “risks related to the collection, retention, and use of sensitive, confidential and/or proprietary customer or user data”. It includes social issues that may arise from incidents such as data breaches in which personally identifiable information (PII) and other user or customer data may be exposed.

It addresses a company’s strategy, policies, and practices related to IT infrastructure, staff training, record keeping, cooperation with law enforcement, and other mechanisms used to ensure security of customer or user data
Employee Health and Safety - Improvements in the Borrower’s “ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities and illness (both chronic and acute).” It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their sub-contractors

The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment
Employee Engagement, Diversity and Inclusion - Improvement in specific, long-term goals relating to improvements in diversity, training and further education
Employee - Training Increase in training hours for employees

C. Governance Categories

Business Ethics - Improvement in the Borrower’s “approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction and culture

It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provides services free from bias and error
Building Strong Corporate Governance and Transparency - Improvements in expertise of individuals sitting on the Borrower’s governance committees e.g. audit / compensation / compliance committees and so forth

Green Economy Financing Facility (GEFF) financing

Green Economy Financing Facility (GEFF) is the product of the EBRD designed to make businesses more competitive, while minimizing their impact on the environment. GEFF provides finance and advice that can be used for variety of purposes to invest in “green”, renewable energy or energy efficiency technologies and projects.

How can GEFF benefit your business?

Better energy performance through installation of high-performing energy efficient and renewable energy technologies
Reduced energy, water and resource consumption, and thus lower operation costs
Greater productivity and reliability of equipment
Improvements in product quality and company image
Increased profitability and competitiveness

If you are looking to purchase “green” technologies, you can check which ones are eligible for a pre-approved investment of up to US$ 300,000 at Technology Selector and visit HSBC Bank Armenia for further details.

If you have a large project of up to US$1 million equivalent and need a complex solution, you can request a FREE technical assessment. GEFF consultants will analyze your project and provide expert advice on making your project most appropriate for GEFF financing.

GEFF financing terms:
Credit activities of the Bank assume individual approach to each Customer and to each deal.

For more information about the facility, please visit: www.ebrdgeff.com/armenia

The GEFF Programme was developed by the EBRD and supported by the Green Climate Fund (GCF) and the Scaling-up Renewable Energy Program (SREP) of the Climate Investment Funds (CIF).