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Thursday, February 8, 2024

With $1B to burn on green tech, HSBC seeks Google’s help

Europe’s largest bank, HSBC, has tapped Google Cloud to make sure a proposed $1 billion in investments go to green tech startups and don’t end up in the hands of scammers.

The partnership ↗ comes as many corporates, including Google and HSBC, face the realities of trying to meet their 2030 net zero climate goals on time. Investing in organizations with carbon-neutral business practices is one way to drive down indirect emissions.

The problem is that it’s not always clear which of these companies are legit and which are playing a game of spreadsheet sustainability, claiming one thing and actually delivering another. For example, last year, it was reported ↗ that as many as 90 percent of carbon offsets are likely fictitious.

Google Cloud has been working on this problem for the better part of two years. In mid-2022, the search giant launched ↗ Google Cloud Ready (GCR) – Sustainability — with the express purpose of vetting partners peddling claims to reduce carbon emissions.

Naturally, Google isn’t just doing this for pure environmental feels. In order to qualify participants of the program have to meet a number of requirements, including submitting at least one case study, proving the service actually addresses real ESG goals in a repeatable goal, and crucially that it runs on Google Cloud.

Google saw an opportunity to capitalize on climate conscious customers by serving up a list of orgs with their stamp of approval.

Beyond shining a spotlight on its sustainable partners, Google’s parent company has made investments in some of them. Alphabet says ↗ its invested billions of dollars in to sustainability bonds to support climate projects. You may recall that geothermal power plant the it worked with Fervo Energy to build ↗ in Nevada.

But why spend your own cash when you can make money spending someone else’s? As part of the collaboration, Google says it plans to connect GCR sustainability partners with HSBC’s climate tech team to explore debt financing.

“Many of these partners need access to finance and we are excited to partner HSBC to support firms key to climate action,” Justin Keeble, managing director for global sustainability at Google Cloud, said in a canned statement.

HSBC has a decent chunk of cash to burn. Back in September the bank revealed ↗ its plans to provide up to $1 billion in financing to startups working on EV charging, battery storage, sustainable food and agriculture, and carbon removal technologies. Incidentally, in its last reported quarter HSBC earned $7.7 billion in profits.

“A step change is needed to scale up the new technologies that will play a critical role in supporting global decarbonization,” Natalie Blyth, global head of commercial banking sustainability at HSBC, said, adding that investments like these are important as VC funding for climate startups declines.

Among the first to receive funding under the partnership is LevelTen Energy. Founded in 2016, the Seattle-based startup deals in backend systems for buying and selling renewable energy.

The terms of the financing deal weren’t disclosed, but Level10 did receive ↗ a $10 million cash infusion from an unnamed beneficiary back in December, so it may not have been much.

Google, for its part, has committed to flushing out more green tech companies and adding them to its GCR sustainability program. ®

Michael Maren
Michael Maren
Former marine biologist who likes to spend as much time in the tropics as possible, due to a horrible time I once had in Alaska. Brrrr.

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