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Leadership in ESG: HSBC Bank Middle East facilitates ESG-Linked Cross currency Swap

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With the upcoming COP27 and 28 to be held in Egypt and the UAE respectively, highlighting the key role that the Middle East will play in combating climate change, it’s no surprise that the transition to net zero is a particular focus for businesses in the region.

Partnering with clients and supporting them in their transition journey, and offering a set of market leading solutions, services and innovations is a key pillar of HSBC’s sustainability strategy. This ambition was on full display in the first quarter of the year, as HSBC Bank Middle East partnered with Metito on its inaugural ESG-Linked Cross Currency Swap.

This is the first ESG-Linked derivative product that offers direct ESG-linked incentives to be dealt by HSBC Middle East and marks a further step in its continued role in developing the sustainable finance market in the region.

As well as being a ‘first’ for HSBC Middle East, this bespoke swap hedges the interest rate risk of Metito’s lending with HSBC while supporting their commitment to meet ESG goals by aligning economic terms to four specific ESG Key Performance Indicators:

  1. Water Consumption Target: Increase the usage of recycled wastewater for district cooling plants in the UAE;
  2. Water Source Target: Reuse more recycled sewage water;
  3. Wastewater Treatment Target: Increase the capacity of treated wastewater in the coming years; and
  4. Social Sustainability Target: Achieve a lower lost time to injury frequency rate

The close collaboration involved in creating the swap’s bespoke structure demonstrates HSBC’s capabilities in the ESG space and the trust that our clients place in us in helping them achieve their own strategic ambitions.

Metito’s vision to be the world’s leading provider of intelligent water management solutions across Emerging Markets is supported by the companies’ 3 founding principles of Impact, Sustainability, Innovation. Metito prides itself on having direct and tangible impact to the Governments, industries and communities that it serves today and believe real ownership can only be achieved if sustainability is fully integrated in ones’ business model.

HSBC is proud to have supported Metito, as one of the pioneers in the water treatment industry, through this transaction, which strengthens Metito’s ability to grow across their target markets, and reflects HSBC’s commitment to the region and its ambition in the ESG space more broadly.

At HSBC, we’re committing $1 trillion to support corporates, institutions, and sovereigns on their transitions to net-zero and we’re also building our analytics capabilities, investing in tools to enable measurement, and participating in thought leadership initiatives to enable us to engage in meaningful dialogue with clients across industry.

We understand that businesses are at differing stages in their transition journeys, and as such focus on offering bespoke solutions that serve the individual needs of clients and help them open up a world of opportunity. Speak to your global relationship manager to discuss tailored solutions from HSBC Global Banking and Markets that can help your business thrive.

**This information has been prepared by HSBC for the purpose of providing information solely to the addressee. By receiving this document, the recipient agrees to keep confidential at all times information contained in it. This information is for the exclusive use of the persons to whom it is addressed and, except with the prior written consent of HSBC, shall not be copied, reproduced, distributed, communicated or disclosed in whole or in part by recipients to any other person. This information is not intended to form the basis of a decision to purchase or sell securities or enter into an investment banking transaction, and does not constitute an offer, invitation or recommendation to purchase or sell securities or to dispose or acquire assets. The information used to prepare this communication was obtained from publicly available sources or proprietary data believed to be reliable and this communication does not purport to be comprehensive and has not been independently verified by any member of the HSBC group of companies or their directors, officers, employees, agents or affiliates (“HSBC”). HSBC expressly disclaims any responsibility or liability whatsoever arising from, or in connection with, the use of or reliance on this document or otherwise. Nothing herein should be relied upon as a promise or representation as to the future, creates any adviser / client relationship between any recipient and HSBC nor does it constitute an invitation or inducement to engage in investment activity nor an offer, solicitation or invitation by HSBC for the sale or purchase of securities or any of the assets, business or undertaking described therein. This communication is directed only at Professional Clients or Eligible Counterparties (as defined in the EU Directive 2014/65/EU on Markets in Financial Instruments Directive, as amended (“MiFID II”) and in the United Kingdom, within the meaning of MiFID II and the Markets in Financial Instruments Regulation (Regulation 600/2014), as amended, and any implementing legislation as it forms part of retained European law as defined in the European Union (Withdrawal) Act 2018 (as amended from time to time ) and is not for use or distribution to Retail Clients. This information is not for distribution, directly or indirectly, in or into the United States and to persons, outside the United States, in compliance with Regulation S of the Securities Act**

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