HSBC Amanah Provides Leading Edge Sustainability-Linked Financing

HSBC Amanah Malaysia Berhad (HSBC Amanah) reinforces its commitment towards a low carbon economy by providing Sustainability-Linked Financing (SLF) to support Yinson Holdings Berhad’s (Yinson) long term vision for building a sustainable business. The RM200 million financing will be a major milestone in supporting this vision.

SLF allows customers to benefit from improved pricing upon achieving agreed sustainability performance targets related to their Environmental, Social and Governance (ESG) rating. By introducing this tiered pricing product feature, customers will be eligible for a discount on the financing rate of the facility. This is achieved by, amongst other things, a decrease in the carbon intensity of the business operations, a reduction in the waste produced, increased diversity and improvements in the overall ESG performance ratings.

The transaction highlights the ability of sustainable finance products to create a positive impact on local communities and the environment.

Stuart Milne, CEO, HSBC Malaysia

According to Stuart Milne, CEO, HSBC Malaysia, “The transition to sustainable operations is a path that organisations across all sectors can and need to increasingly follow to achieve their growth ambitions.

To enable this shift, in 2017, HSBC issued the world’s first United Nations (UN) Sustainable Development Goals (SDGs) bond followed by the world’s first UN SDG sukuk by HSBC Amanah in Malaysia. Throughout the course of 2019, HSBC continued to develop industry leading sustainable product offerings. The transaction with Yinson is a key example of how HSBC can extend support to our customers in enabling them to achieve their sustainability goals.”

Yinson, which is a leading energy solutions provider with business activities in offshore production and more recently, renewables, has a long term vision of building a sustainable business that will positively impact the world’s energy landscape and the communities where it operates.

Lim Chern Yuan, Group CEO of Yinson Holdings Bhd

Mr Lim Chern Yuan, Group CEO, Yinson said, “We believe that sustainability-linked financing will play a major part in encouraging businesses to strengthen their environmental, social and governance practices, thereby creating a more sustainable future for everyone. Sustainability is one of Yinson’s core values and a key focus for Yinson. We are honoured to have been selected by HSBC Amanah to be an early adopter of this sustainability-linked financing arrangement.”

The financial services sector has a critical role to play in supporting sustainable business activities. There is an impetus on the industry to change the nature of capital and increasingly direct it in more sustainable ways. Islamic banking is well placed to assist in this area. Within Malaysia, this is further supported by BNM’s Value-Based Intermediation initiative which aims to have Islamic financial institutions create greater value and impact.

“HSBC Amanah is committed to transforming into a sustainable banking entity and this
transaction exhibits part of the work that is being done to achieve this goal.
Significantly, the new financing option will be pivotal to developing the landscape of
sustainable banking products available in Malaysia,” Oz Ahmed, CEO, HSBC Amanah said.

HSBC Group aspires to be a leader in sustainable financing, managing and shaping the shift to a low-carbon world. The bank has set out a series of commitments globally in support of this goal, including a pledge to provide USD100 billion to sustainable financing and investments by 2025. In 2019, HSBC was named by Euromoney as the World’s Best Bank for Sustainable Finance. In 2019, HSBC Amanah’s UN SDG sukuk was also awarded the Islamic Deal of the Year as part of The Asset Triple A Islamic Finance Awards.

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