Dive Brief:

• HSBC has teamed up with Google Cloud to financially back companies that aim to expedite climate mitigation through technology solutions, the bank announced last week. The partnership will support companies the U.S. tech giant selects for its Google Cloud Ready-Sustainability program.
• The GCR-Sustainability program seeks to “meet the needs of customers along their own ESG journeys” by helping them achieve goals such as carbon emissions reduction, increased sustainability across supply chains and processing of ESG data so they can measure performance and better identify climate risks, according to its website.
• The collaboration will allow Google Cloud to increase its number of partnerships in the GCR-Sustainability program — which include Airbus, Planet Labs, Watershed and more — over the next two years. It will also help HSBC deploy funding to selected companies as part of its goal to invest $1 billion in early-stage climate tech businesses.

Dive Insight:

Companies that are selected to be part of the GCR-Sustainability program undergo a robust validation process where Google assesses the quality of the technology in development and whether such solutions are backed by area expertise and climate science. Google also uses that process to evaluate the technology’s traction among customers.

Under the new partnership, members of the GCR-sustainability program will be able to explore venture debt financing options offered by HSBC’s specialist climate tech finance team. The deal’s inaugural financing package will go to LevelTen Energy — a clean energy transactions and data platform that gives its clients access to renewable transaction infrastructure.

“Partnerships and innovative financing solutions are key, especially during a period when investment in climate tech startups has fallen,” Natalie Blyth, HSBC’s global head of commercial banking sustainability, said in the press release. “By combining financing support, cloud technologies and connectivity to partners across our combined footprints, we will help climate tech vendors accelerate their growth and develop the solutions we urgently need at scale.”

Justin Keeble, Google Cloud’s managing director for global sustainability, said climate action requires “technology providers bringing solutions that drive impact,” but noted many of these companies need access to finance — making the partnership with HSBC even more valuable.

The London-based bank’s initiative builds on its goal of facilitating $750 billion to $1 trillion of investments and sustainable financing by 2030. In its first net-zero transition plan — which the bank unveiled last month — HSBC said it has provided $210.7 billion in funding to support both environmental and social activities since it set that target in 2020.

The net-zero transition plan also noted the bank plans to phase-down financing it provides to carbon-intensive sectors, in line with keeping global temperature rise below 1.5°C. HSBC has set 2030 targets for industries such as oil and gas, power and utilities, transport and heavy industry — which includes thermal coal mining and manufacturing of iron and steel — and said it would disclose progress toward these targets annually.

However, shortly after publishing the transition plan, HSBC told Bloomberg it has no plans to blacklist major polluters and will continue to work with high-emitting clients as it believes severing ties doesn’t help the broader economy.