HSBC Unleashes US$1 Billion to Fuel Climate Tech Startups Worldwide
Mokshita P.
10x Industry

HSBC Unleashes US$1 Billion to Fuel Climate Tech Startups Worldwide

This initiative aims to counter a recent 40 percent drop in VC funding for climate startups in H1 2023. HSBC focuses on supporting innovation worldwide to drive emissions reduction toward 2050 net-zero goals.

In a move to combat climate change, HSBC has announced plans to make US$1 billion in financing available to early-stage climate tech companies across the globe. This initiative seeks to bolster start-ups dedicated to developing innovative solutions in key areas such as electric vehicle (EV) charging infrastructure, battery storage, sustainable food and agriculture, and carbon removal technologies.

HSBC's commitment to fostering climate tech innovation aligns with the launch of its Innovation Banking and HSBC Asset Management's Climate Tech Venture Capital strategy. The financing initiative comes at a crucial juncture when venture capital funding for climate start-ups has experienced a 40 percent decline in the first half of 2023, despite previous years of rapid growth.

Barry O’Byrne, CEO of Global Commercial Banking at HSBC, stressed the significance of access to finance for early-stage climate tech companies in scaling their real-world solutions. He emphasised HSBC's global reach, climate tech expertise, and the newly introduced Innovation Banking proposition as factors that will provide unparalleled support to pioneering companies in the climate tech sector.

HSBC recognises the Middle East's pivotal role in the transition to a net-zero global economy, particularly with COP28 taking place in the UAE this year. Patricia Gomes, Regional Head of Commercial Banking, HSBC MENAT, expressed optimism about the transformative investment opportunities in climate-related projects in the MENAT region and the role of this financing in supporting the ambitions of commercial banking customers.

While most early and growth stage climate tech investment has traditionally centred on the USA and Europe, HSBC's US$1 billion allocation is designed to target high-potential climate tech firms worldwide. It is estimated that nearly half of the emissions reductions required to achieve net-zero status by 2050 will hinge on technologies currently in the demonstration or prototype phase.

HSBC's overarching goal is to expedite the market entry of critical climate tech innovations. This includes supporting early-stage companies and providing capital for groundbreaking demonstration projects, backed by a US$100 million investment in Breakthrough Energy Catalyst. HSBC is focused on companies operating in clean energy; sustainable food, agriculture and land; clean mobility & transport; sustainable manufacturing & industry; greenhouse gas emission capture & storage; sustainability management & reporting; and sustainable built environment.

As the world grapples with the urgent need to combat climate change, HSBC's commitment to climate tech innovation signals a significant step towards realising a sustainable future and accelerating the adoption of transformative technologies worldwide.