HSBC UAE has managed to secure the first green deposit from Saudi British Bank (SABB) through its new program dedicated to supporting sustainable initiatives.
The deposit will be used solely to finance green initiatives, HSBC said in a statement.
“It is the first green deposit issued in [dirhams] and one of the first green deposits made by a financial institution in the Middle East,” the bank said.
HSBC launched in June its Green Deposits offering for commercial and institutional clients in the UAE. Funds deposited will go to the financing of green projects, helping businesses achieve their sustainability goals.
According to Mohammed Al-Shaikh, deputy managing director for treasury at SABB, the funds deposited with HSBC represent Saudi Arabia’s first green deposit.
“[This deal] is a true testament of the pivotal role ESG plays in our merged bank’s newly announced strategy.”
Like many other organizations, banks across the world have recently started embedding environmental, social and governance (ESG) causes into their strategies.
“Banks [are] starting to feel pressure from their customers and from the public at large. Customers want to bank with a firm that reflects their views and beliefs; younger generations, in particular, are said to be choosing their bank based on their ESG credentials,” KPMG said.
According to Philippe Robert, regional head of FI sales and international markets, global liquidity and cash management at HSBC Middle East, North Africa and Turkey, there has been an increasing demand for sustainability-linked products.