Hysan Development has unveiled the first-ever sustainability-linked derivative hedging solution from a Hong Kong company, saying it marks a significant development for its green finance ambitions. Under the terms of a near-15-year sustainability-linked hedge of US$125 million, the Hong Kong property developer commits to remain as a constituent member of the Hang Seng Corporate Sustainability Benchmark Index, which ranks the top 20% of Hong Kong companies based on their sustainability performance on broad metrics, for the period of 2021 – 2024; and to reduce its energy consumption by 20% by December 31, 2024, according to a statement issued on Tuesday (October 20).

If Hysan is not successful in reaching the two goals, it will make a contribution to an impact-driven charity approved by the issuing bank, BNP Paribas.

Hysan's chief operating officer Ricky Lui comments: “We recognize the critical role that the real estate sector must play in fighting climate change, given buildings consume around 90% of Hong Kong’s electricity and generate over 60% of all its carbon emissions. These undertakings signal our company’s commitment to continue to contribute to this increasingly important area.”

Pascal Fischer, head of global markets for Asia-Pacific at BNP Paribas, notes: “As a bank with a real commitment to financing a sustainable future, we are pleased to bring this innovative derivative solution to Hysan to help it reduce its carbon footprint and improve its overall ESG performance.”

Last year, Hysan established its Green Finance Framework, which provides guidance on the funding of sustainable building development and enhancements through the issuance of green bonds or green loans. BNP Paribas pioneered sustainability-linked FX hedging solutions, with this hedge the first issued from within Greater China.