HSBC launches first gender equality indexed loan

The Hongkong and Shanghai Banking Corporation (HSBC) in Bangladesh has structured the country’s first-ever sustainability linked loan targeting Sustainable Development Goal (SDG) 5: Gender Equality, for DBL Group.

Sustainability linked loans aim to improve the borrower’s sustainability profile by aligning loan terms to the borrower’s performance against pre-determined Sustainability Performance Target (SPT) benchmarks, a press release said on Wednesday.

Under this unique incentivised sustainable loan agreement, interest rates are tied to two areas of performance – the increased percentage of female supervisors employed and greenhouse gas emissions reductions.

“Encouraging female leadership is not only the right thing to do but also has a clear business case. We have observed marked improvement of quality control with female supervisors and now are encouraged to see global financial institutions like HSBC offering economic incentives to do more,” DBL Group Managing Director, MA Jabbar said.

HSBC Bangladesh Chief Executive Officer, Md Mahbub-Ur Rahman said, “We are focused on helping our clients achieve their sustainability goals; be they environmental, social or governance-related.”

“As our customers’ transition into the new sustainable economy, we stand firm beside them with best practices from around the world and global expertise. We thank DBL Group for being pioneers in two important areas – promoting workplace gender equality and reducing greenhouse gas emissions,” he added.

“We understand the critical role financial institutions can play in driving forward sustainable business models. And we are glad to have clients like DBL who are pioneers in this space in Bangladesh. I must extend my thanks to the DBL sustainability team who have worked tirelessly with us in structuring this transaction.” HSBC Bangladesh Head of Wholesale Banking, Kevin Green said.