Friday, July 19, 2024
HomeTechnologyTogether with Google, HSBC aims to finance $1 billion in climate technology.

Together with Google, HSBC aims to finance $1 billion in climate technology.

Executives from both companies told Reuters that HSBC, the largest bank in the United Kingdom, has joined with Google (GOOGL.O) to finance rapidly expanding climate technology companies that are responsible for some of the most promising solutions to climate change in the world.

As per the agreement, HSBC will try to finance businesses that the US tech giant hand-picks to be a part of its Google Cloud Ready-Sustainability program.

Participants in the program go through a validation procedure where Google evaluates the effectiveness and quality of the technology under development as well as its uptake by users.

Companies are expressing a desire to expedite the accomplishment of their sustainability objectives. However, there is some uncertainty about which of the available options will actually assist them solve their difficulties.

“HSBC’s finance will help those partners scale their businesses, and then HSBC will help customers access all this innovation.”

Martin Richards, global head of climate tech and sustainable finance at HSBC, said Google’s due diligence provided “a certain comfort” that complemented the bank’s own assessment of potential new ‘venture debt deals’ – where a lender provides debt financing for inherently riskier companies.

Scaling technologies that can help the corporate world move more quickly to a low-carbon economy dominated the COP28 climate talks in Dubai in December, and is a crucial part of most banks’ efforts to drive a global push to cut emissions.

But finance to the sector fell sharply in 2023, PwC data shows, as investors and lenders fret about risk.

“We feel like we are increasing our odds of success by working with partners like Google. We recognise we’re taking credit risks but that is all part of banking,” Richards said.

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