Saudi Arabia’s Ministry of Investment has signed a memorandum of understanding (MoU) with banking giant HSBC to identify and promote sustainable finance in the kingdom.
The agreement, signed at the Future Investment Initiative conference in Riyadh, covers sustainable investments in the kingdom for domestic and international investors, identification of sustainable investments overseas for leading Saudi companies and supporting public and private sector entities in climate transition and the broad environmental, social and governance (ESG) agenda.
The Minister of Investment, Khalid Al-Falih (pictured below), said: “I welcome today’s agreement, which is further proof that the kingdom’s ambitions to become a global sustainable investment destination is on track.
“This agreement is leveraging on the long-standing historical relationship between the kingdom and HSBC and will help us unlock the tremendous green investment opportunities in Saudi Arabia.”
HSBC Group CEO, Noel Quinn added: “HSBC is committed to helping lead the transition to net zero and this memorandum of understanding is another important step in meeting that goal. This collaboration will see us promote sustainable investment opportunities and investment initiatives in the kingdom to our clients, and support leading Saudi Arabian companies to access opportunities with global strategic and financial investors, especially Asian investors.”
The MoU, which is effective immediately, envisages the creation of an eco-system of partners in the areas of sustainability and ESG, a statement said.
To support customers in their transition to lower carbon emissions, HSBC said it aims to provide up to $1 trillion of financing and investment globally by 2030. The bank also aims to be net zero in its operations and supply chain by 2030.
Earlier this week, Quinn forecast that 2021 is set to be the first trillion-dollar year for green bonds, with a “major industrial transformation” in the next decade pushing firms to become carbon neutral or carbon light.
Speaking at the Middle East Green Initiative Summit in Riyadh, Quinn said that in the first nine months of 2021, green social and sustainable bonds raised more than $777 billion.
Earlier this month Saudi British Bank (SABB) became the first Saudi institution to make a green deposit as the clamour for sustainable finance increases in the Gulf region.
The funds, deposited with HSBC in the UAE, will be used solely to finance green initiatives.
It is the first green deposit issued in UAE dirham and one of the first green deposits made by a financial institution in the Middle East.
The deal comes just a few months after HSBC launched green deposits in the UAE. The bank said interest in the sustainable financing option has been immediate, with this being the third green deposit issued so far.
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