Businesses in the early stages of their sustainability journeys often find “conventional” SLLs beyond their reach, says HSBC in a Nov 21 announcement, “primarily due to limited resources for measuring and reporting their ESG performance”.
A new loan structure by HSBC aimed at small- and medium-sized businesses in Singapore uses an annual sustainability assessment to determine borrowers’ cost of financing.
Like sustainability-linked loans (SLLs), firms that improve their scores throughout the tenure of their loan with HSBC may benefit from reduced interest rates. However, should borrowers’ scores decline, the rates on their loans may increase under HSBC’s new Sustainability Improvement Loan.
