Helping Companies Along Their Sustainability Journey

Thursday, April 15, 2021

By Mark Hillhouse, SVP, Head of Sustainable Finance, US CMB

Recently, HSBC’s senior leadership made commitments to achieve net zero operational emissions by 2030 and net zero financed emissions by 2050. The first goal is focused on our own sustainability initiatives – but reaching that second goal is all about supporting our customers as they look for more sustainable ways of doing business. This often involves getting clients who aren't thinking that way yet interested in sustainability and sustainable finance, says Mark Hillhouse, HSBC Sustainability Lead based in Atlanta, GA. “Helping companies begin and move through their sustainability journey is one the most exciting parts of my job.”

Mark joined HSBC 10 years ago, starting in San Francisco to help build the bank's middle market business in the US. The focus then, of course, was technology. However, it wasn't long before sustainable finance became increasingly important, including a focus on clean technology. “I grew up in a military family and spent a lot of time outdoors throughout the US, as well as in Europe and Asia. I was also fortunate to spend a lot of time exploring the California coast and the Sierras.” Mark says. When the opportunity to lead Corporate Banking’s sustainability efforts, he jumped at the chance. “I just loved the idea that I’d be able to integrate my desire to preserve the world and the outdoor spaces I grew up in with my job as a banker.”

Every step – large and small – makes an impact in the journey to sustainability

“Sustainability has become both an opportunity and a problem for businesses,” says Mark. “It’s no different than competition, supply chains, legal issues and all of the other challenges and opportunities that come along with running a business.” That's why companies need to be prepared to talk about what they are doing to make their businesses more sustainable – to investors, certainly, but also customers, employees, banks and more.

"I think where some businesses get stuck is thinking that sustainability means making big changes,” explains Mark. “People think it’s all about solar panels and wind farms or creating energy-efficient buildings." These are all critically important to a low-carbon future, says Mark, but companies can also make small changes that are incredibly impactful. “We have one client – a global leader in beauty care, laundry and home care and adhesive technologies – who used a green bond to finance their research and development. Their goal was to improve the circularity of their products by creating more sustainable packaging." Another example Mark cites is an Atlanta-area waste management company who developed reporting to help businesses understand what they’re recycling versus what they are sending to landfills – and track that year after year to show them where they can improve.

"I guess what I'd say is that a lot is happening behind the scenes,” says Mark. “Just because you don’t see a company making sweeping changes doesn’t mean they aren’t doing their part.”

COVID-19 as a driver for sustainability

While there was already a movement toward clean and green investment, says Mark, but the pandemic made people realize we need to be - and can be better. “If you look at Tesla as an example, it’s clear that’s what investors are counting on."

The company went public in June of 2010 at $17/share. In mid-March 2020, prices were $86/share – whereas by mid-March 2021, they were close to $680/share, down from a high of $900.

“Where COVID-19 is concerned, I'd like to see the world recognize that the innovation capabilities that brought us a vaccine within a year apply to supporting the transition to a lower-carbon world.”

Working toward a sustainable future

The summer of 2020 saw rolling blackouts across California for the first time in two decades. Later that year, a devastating winter storm left an estimated 4.5 million homes and businesses without power across Texas. It's clear that we have issues in our grid to resolve in the US, says Mark. He also feels that carbon capture and green hydrogen will also be game-changers looking forward. New technologies and software will be the key, he says. Whereas at the beginning of the century, companies spent a lot of time and money on hardware – making machines, now the emphasis is on creating software that makes those machines more efficient.

When it comes to everyday life, however, Mark believes we really need to focus on finding ways that make sustainability easy-to-use. "The more user-friendly, the more people will adopt these solutions." That's what Mark and other Sustainability Leaders are looking to do – help companies develop and promote clean technology solutionsthat are easily embraced. "Part of the way we do that is by having conversations with investors and companies who continue to think about the path to a more sustainable future," says Mark.