HSBC has completed its first sustainability-linked trade finance transaction with Hong Kong-based garment maker Epic Group.
The pricing of the facility was tied to Epic Group’s performance in areas such as greenhouse gas emissions intensity and freshwater use intensity, and the proceeds from the facility will support Epic Group’s working capital and trade cycle.
The facility was also tied to the Higg Facility Environmental Module – a system commonly used by multinational garment brands to review suppliers’ sustainability capacities.
HSBC said the transaction marks a new milestone in its ability to deliver green finance solutions to global brands, and will serve as a model for building sustainable supply chains.
Frank Fang, head of commercial banking for Hong Kong at HSBC, said: “More companies have set supply chain sustainability as a key corporate goal, focusing on the environmental and social impacts of their product life-cycles.
“As Epic Group’s banking partner for more than 40 years, it is our pleasure to offer further support to their net-zero transition journey.”
Epic Group is a multinational textiles and garment manufacturing group whose activities span the entire garment supply chain, from design and fabric sourcing to manufacturing.
Its client base includes the likes of global brands such as Walmart, Amazon, Uniqlo, and Levi’s.
In December last year, as reported by Trade Finance Global, HSBC announced that it has partnered with Walmart to launch a sustainably-linked supply chain finance programme.
Ranjan Mahtani, founder and group chairman at Epic Group, said: “HSBC has been a strong supporter and partner since our inception.
“It gives us great pleasure to partner with HSBC on the sustainability-linked trade initiative as sustainability is the core and helm of our operations.
“This facility will propel us even further to enhance our relentless mission of achieving sustainability leadership and making the world a better place.”
HSBC added that it has been embedding sustainability into its products and services in Hong Kong, including access to capital markets, lending, transaction banking, advisory services, and investments
It is also offering a range of tailored solutions for companies of different sectors and sizes.