Noel Quinn, CEO of HSBC, has 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.
“From my humble perspective I believe we’re about to see the next major industrial and commercial transformation in the next 10-15 years. Industries will need to adopt new technologies and business models that will allow them to become carbon neutral or carbon light,” he told the summit.
“Entirely new industries will be emerging. That will require a significant amount of investment but will also create a huge economic opportunity for each of your economies,” he added.
“We’re actually on track this year for it to be the first trillion dollar year for green bonds. We’ve seen that reflected in our own business – this year alone, we have already helped customers issue $170 billion dollars of green bonds.”
The comments follow the news earlier this month that the Saudi British Bank (SABB) has become 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.
Earlier, the Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud announced a series of regional programs for climate action to an audience of dozens of heads of state at the event.
On Saturday, he also revealed that Saudi Arabia is aiming to achieve net zero emissions by 2060 through the Carbon Circular Economy approach.
The Middle East Green Initiative also called for intensifying coordination and joint action to preserve and develop the importance of the environment and vegetation cover in Africa, in addition to establishing the Green Initiative Foundation as an independent non-profit entity to support the summit and raise the level of coordination.
Quinn adds “with a broader range of structures and greater variety of issuers than ever before, the next phase of development will require more than just capital market activity. It will require a fundamental reengineering of the commercial banking sector to support the activities of the corporates we serve”.
(Except for the headline, this story has not been edited by The Finance World staff and is published from a syndicated feed.)
