HSBC issues first green mortgages in the UAE

The three sustainable loans are also the first green mortgages issued by HSBC globally.

HSBC has issued the first green mortgages in the UAE, heralding a significant moment for the country’s housing market, future homeowners, and sustainable finance. 

The three loans were approved for HSBC customers purchasing houses in The Sustainable City community in Dubai. HSBC UAE’s green home loans offer an interest rate discount of 0.25 per cent for properties that meet certain sustainable criteria, and a 50 per cent discount on applicable arrangement fees.

Daniel Robinson, Head of Wealth & Personal Banking at HSBC UAE, said: “Sustainable development is more important now than it’s ever been and it’s vital that banks support customers with competitively priced green finance, and to encourage more sustainable behaviours. Issuing the UAE’s first-ever green mortgages is a significant moment for the country’s housing and financial markets, and demonstrates the appeal of green retail finance to customers looking to make more sustainable decisions while appreciating the financial upside.

“At HSBC we have developed a number of products that support the long-term sustainable development goals of the nation, and as the UAE aims to fulfil its commitments to the Paris Agreement we are proud to be contributing to the sustainable future of the nation.”

Not only a first for the UAE, the green mortgages are also the first issued by HSBC globally, demonstrating the importance of the UAE to HSBC’s global strategy and underlining the bank’s commitment to environmental, social, and governance issues in the Emirates.

Faris Saeed, Chairman of Diamond Developers, developer of The Sustainable City, said: “We, at The Sustainable City, are proud to be the first development in the region to have our residents benefit from the issuance of HSBC’s green mortgage. With a commitment towards achieving net-zero carbon living, we have worked hard to set high standards of sustainability across all our communities and it is our great pleasure to be part of this milestone for the UAE. We would like to thank HSBC for their achievement in bringing this green mortgage to the market and their commitment to global climate action.”

In January 2021, HSBC formed a dedicated Sustainable and Transition Finance Team (STFT) in the Middle East to help institutions, corporates and individuals transition to a more sustainable economy. HSBC saw a six-fold increase in 2020 over the previous year in sustainable and transition finance activity in the region.

HSBC’s green mortgage product is applicable for properties that are either LEED-certified or if they meet similar requirements, and HSBC’s STFT reviews properties to validate eligibility on a case-by-case basis. As well as green mortgages, HSBC UAE’s Wealth & Personal Banking business offers other sustainable products including green car loans and sustainable investment fund options.

Globally, HSBC has stated its ambition to align financed emissions from its portfolio of customers to the Paris Agreement goal of net zero by 2050 or sooner. HSBC is expecting to provide between USD750 billion and USD1 trillion in sustainable financing and investment by 2030 to support its clients as they switch to more sustainable ways of doing business. The bank aims to be net-zero in its own operation by 2030.

In 2019 and 2020, HSBC was named both the World’s Best Bank for Sustainable Finance1 and the Best Bank in the Middle East for Sustainable Finance.2