A new £500m Green SME Fund to help small and medium-sized businesses thrive in a low carbon economy has been launched this week by HSBC UK.
The bank announced the green fund, the first of its kind in the UK for small businesses with a cashback proposal, during COP26 last November. It forms part of a commitment to support the transition of businesses regardless of their size and already made a global commitment to provide between $750bn and $1tr of financing and investment to support its customers over the next 10 years.
The new green fund is available for businesses with a turnover of less than £25m and will offer 1 per cent cashback on loans, starting from £1,000 to help SMEs invest in green activities.
Small and medium-sized enterprises are becoming more frequently recognised as the ‘new front’ in the battle against climate change, as the sustainable finance market has tended to focus on larger businesses.
The use of loan proceeds must meet HSBC’s Eligible Criteria for Green Activities, which have been reviewed by Sustainalytics, and evidence must be produced to qualify for the cashback
Ian Stuart, CEO HSBC UK, said at COP26: “Companies of all sizes and sectors have a role to play in the journey to net-zero, however, the sustainable finance market has been predominately focused on larger corporations. It’s critical that access to funds isn’t a barrier for small and medium-sized businesses working to achieve lower carbon emissions.
“We want to help businesses seize the opportunities and growth potential that environmental sustainability offers and the fund, along with our new and expanding suite of tools and resources, will make it easier for small businesses to take practical steps to cut their emissions and help their customers to cut theirs too.”
Gemma Finegold, Consultant within our Sustainable Finance team at Acre said: "It is great to see products like these aiding SMEs with their decarbonisation journey. Senior Managers of SMEs are all too aware that a dedicated net-zero strategy is now essential to improving reputation with customers and enhancing revenues."
New research from HSBC UK revealed that although half of the businesses admit to feeling pressure from customers, government and the media, just 23 per cent are measuring environmental metrics. A quarter of small businesses claim cost is a key barrier yet they want to play their part as they believe a focus on environmental sustainability will grow their business in the next 12 months.
The Green SME fund is one of the latest additions to HSBC UK’s sector expertise and green product range for British businesses. It comes with a Sustainability Assessment Tool that provides insights and resources to help smaller businesses transition towards net-zero emissions.
To learn more about upcoming opportunities within Impact Investing, please contact Gemma via gemma.finegold@acre.com
Gemma is part of Acre's Banking & Finance recruitment team working on retained searches for sustainable & impact investing projects across the globe. She joined Acre from Lutyens Advisory where she worked on searches in the asset management and family office space.
