HSBC, one of the world's largest banks, has announced its commitment to supporting climate-tech innovation by pledging $1bn in financing for early-stage climate-tech companies worldwide. This move comes amid a recent downturn in venture capital funding for climate startups, which saw a 40% plunge in the first half of 2023.
The bank's funding is set to assist startups across various sectors such as electric vehicle (EV) charging, battery storage, sustainable food and agriculture, and carbon removal technologies. The initiative aligns with HSBC's focus on sustainability and its dedication to accelerating the development and deployment of climate-tech solutions as part of the global transition to a net-zero economy.
Barry O'Byrne, CEO of Global Commercial Banking at HSBC, emphasized that access to finance is crucial for these early-stage climate tech companies to create and scale real-world solutions. "We are already working with some of the most exciting companies at the forefront of climate tech, from seed to global scale-up. With HSBC's global reach, in-house climate tech expertise, and newly launched Innovation Banking proposition, we can offer these pioneer companies unrivaled support," O'Byrne said to ESGNews.
While most early and growth stage climate tech investments have been concentrated in the USA and Europe, HSBC's $1bn allocation plans to focus on high potential climate tech companies globally. The bank aims to enable these critical technologies to reach the market more quickly at scale.
In addition to this commitment, HSBC will invest $100mn in Breakthrough Energy Catalyst, a platform that supports firms using emerging technologies to transition to cleaner energy sources. This investment is part of HSBC's strategy to provide capital for first-of-a-kind demonstration projects and support climate tech innovation scale.
Estimates suggest that almost half the emissions reductions required to reach net zero in 2050 will come from technologies that are currently in the demonstration or prototype phase, underscoring the importance of this investment. The bank's commitment to climate-tech startups is part of its broader strategy to deepen its support for the ecosystem of climate tech innovation.
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