London-based HSBC has partnered with Google to provide financing to high-potential climate technology companies.
Google Cloud Ready aims to accelerate the growth and impact of sustainability partners who are creating innovative solutions to environmental problems. Google tests and examines the efficacy and quality of companies’ technologies.
With Google’s help, HSBC will complete its risk assessment system for potential “enterprise loan deals”. This type of financing from HSBC lends to risky startups that may be ineligible for normal loans.
The goal is to develop technologies that can accelerate corporate sustainability efforts and the broader transition to a low-carbon economy. In recent COP28 climate summit talks, the need to rapidly reduce emissions was stressed.
Funding Slowdown in 2023
However, PwC data shows that climate tech funding fell significantly last year as investors became more concerned about the risks. The HSBC-Google collaboration aims to help fill this funding gap.
“Companies want to meet their sustainability goals faster, but there is confusion about which solutions will solve their problems,” said Justin Keeble, managing director of Global Sustainability for Google Cloud. HSBC’s funding will be of great help in doing this.”
The tie-up comes a year after HSBC failed the Silicon Valley bank’s UK branch. The UK government encouraged the deal to drive transition in the startup financing ecosystem.
HSBC followed six months later by pledging $1 billion to climate tech firms by 2030. The bank said it has already exceeded its internal target on that commitment. HSBC’s latest innovation banking division and Google’s partnership could lead to more climate-oriented loans.
Overall, HSBC aims to deliver 1.3 million corporate clients to net-zero emissions by 2050. Google’s programs together with climate tech providers can accelerate this transition.
First Venture Debt Deal
HSBC announces latest initiative, venture debt financing for Levelten Energy, in partnership with Google. Terms have not been released.
The 30 companies participating in the Google Cloud Ready sustainability program provide data-driven solutions that help enterprises reduce emissions. For example, an airline could use its technologies to reach net-zero, which is a significant source of sustainable aviation fuel.
HSBC wants to connect with climate tech firms that can assist clients in carbon-intensive sectors on their decarbonization journey.
“Technology and finance will be key climate action enablers,” Keeble said. Clients are having to manage massive amounts of data to take action and gain insight into sustainability. “HSBC understands the importance of data in solving this problem.”
This partnership highlights the important role that collaboration between finance, technology and sustainability solution providers can play in accelerating climate change. Tailored financing tools can rapidly scale game-changing innovations that can reduce emissions in carbon-heavy industries.