HSBA Hsbc Holdings Plc

By Dieter Holger

The U.S. arm of HSBC Holdings PLC started offering sustainability-linked loans to its commercial banking clients, tapping into a growing market that finances increasingly ambitious environmental, social and governance goals at corporations.

HSBC Bank USA said late Wednesday that the terms of the loans will be linked to pre-determined sustainability targets and companies that meet the goals will pay lower interest. The loans follow the Sustainability Linked Loan Principles set by the Loan Market Associations.

Debt that supports aims such as greenhouse-gas emission cuts, renewable-energy use, water conservation and workforce diversity has increased as companies work to attract investors and meet mounting regulations. Borrowers can often get sustainability-linked loans with interest rates below the normal market.

ESG-linked loans reached close to $96.3 billion in the first quarter of 2021, up from nearly $34.4 billion in the previous year's first quarter, according to Dealogic.

"We want to provide loans and access to credit in ways that meet the needs of American businesses, from financing growth and investment to support their sustainability strategy," said Julie Bennett, HSBC's Americas head of ESG.

Write to Dieter Holger at dieter.holger@wsj.com; @dieterholger

(END) Dow Jones Newswires

June 17, 2021 06:05 ET (10:05 GMT)

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