Standard Chartered to open paperless ‘green branch’ in Hong Kong offering sustainable finance products, says local boss

Several of the city’s major lenders have been offering new products and services designed to support its aim of becoming a green financing hub
Green finance is ‘not just a gimmick any more’ but can bring business opportunities for banks, says analyst

Banking & finance

Enoch Yiu

Published: 8:30am, 9 Aug 2021

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Standard Chartered, one of three note-issuing banks in Hong Kong, plans to open a “green branch” this year in the latest move by a local lender to promote banking services that can help cut pollution.

The branch, whose location is not yet confirmed, will be fully paperless and will offer a wide range of bank products with a green concept, including deposits, loans and bonds that are tailor-made for environmentally friendly projects, according to Mary Huen Wai-yi, the bank’s Hong Kong chief executive.

It will also open up its green deposits to retail investors this year, having already made them available to companies, she said. The bank will only use the pool of funds held in green deposits to finance projects that can help reduce pollution, such as renewable energy installations, in line with both Hong Kong and mainland China’s carbon-neutrality targets.

Standard Chartered and its note-issuing rivals HSBC and Bank of China Hong Kong (BOCHK) are among the major lenders that have been offering new products and services designed to support the city’s aim of becoming a green financing hub.

The promotion of green finance in Hong Kong and in mainland China follows a pledge by President Xi Jinping in September last year to attain carbon neutrality by 2060. Hong Kong’s chief executive Carrie Lam Cheng Yuet-ngor announced in her 2020 policy address that the city would strive to achieve this target by 2050.

“With the promotion by the governments and the strong demand of customers, we believe in the huge opportunities arising from green finance businesses such as green bonds, green loans and green deposits. This is why we believe it would be a good idea to have a green branch,” Huen said during a media briefing.

“The green branch concept will hopefully help to bring awareness that companies and individuals can help to contribute to sustainability.”

The Hong Kong Monetary Authority, which is responsible for investing the city’s financial reserves, will place more of its managed Exchange Fund in stocks and bonds that adhere to environmental, social and governance (ESG) concepts to achieve better returns, its chief executive Eddie Yue Wai-man said in a conference in June.

HSBC, the largest lender in the city, last week introduced a new ESG-themed structured note which allows its wealthy customers to invest in projects with a sustainable theme.

In July it arranged a HK$258 million green guarantee to support construction firm Gammon’s expansion work at Terminal 2 of Hong Kong International Airport. HSBC has also offered green certificates of deposit for retail and institutional investors over the past two years.

BOCHK offered green time deposits to companies last year, which are used to support projects in green building and renewable energy. It also has a wide range of ESG funds, including one investing in the shares of Chinese companies listed on mainland exchanges.

Green finance products have proven to be popular. BOCHK’s 1.5 billion yuan green bond last month was 3.5 times oversubscribed.

“Green finance is not just a gimmick any more – it can bring business opportunities for banks. It is the right direction for Standard Chartered and other banks [because it will] bring better profit for them,” said Louis Tse Ming-kwong, managing director of Wealthy Securities.

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