Global banking and financial services company HSBC announced today the launch by HSBC Global Markets in Korea of one of Asia’s first sustainability-linked derivative products, a two-year, structured USD$100 million US dollar ESG-linked cross currency swap to Hana Financial Investment.
Sustainability linked securities are an emerging form of sustainable finance instruments, with financial attributes including tied to an issuer’s performance towards specific sustainability targets, including the achievement of key performance indicators (KPIs).
In the case of the new derivative product, the KPI is linked to the client’s parent group’s ESG risk rating set by ESG ratings provider Sustainalytics. If the client meets its target, it can receive a benefit in the form of a premium payment or discount.
Eunyoung Jung, President and CEO of HSBC Korea, said:
“With this ESG derivative, market participants will be able to enjoy a much wider and flexible range of sustainable finance products. It is another testament to HSBC’s commitment to a sustainable future, and part of its strategic efforts to open up a world of opportunity for its customers.”