How is EC Healthcare connecting its ESG commitments directly to its cost of capital?

Find out how EC Healthcare is aligning its finances with its prescription for sustainable growth.

As the biggest non-hospital healthcare services provider in Hong Kong, EC Healthcare’s business is focused on making a positive impact on society. The group’s many brands promote health and well-being through diagnostic imaging centres, family medicine, specialist centres for fertility, women’s health and cancer, as well as beauty, dental and anti-aging services.

In May 2023, EC Healthcare reinforced its commitment to a sustainable future with an innovative financing that weaved sustainability strategy and targets into its finance operations.

EC Healthcare’s HK$1 billion (USD$128 million) sustainability-linked loan (SLL) is the first syndicated SLL from Hong Kong’s healthcare sector. Signed with a consortium of five banks, it requires EC Healthcare to meet a number of clear environmental, social, and governance (ESG) targets aligned with the latest Sustainability-Linked Loan Principles, including a reduction in carbon intensity and an increased focus on employee training.

The response from the banking community provided a strong endorsement of the company’s sustainability targets, including robust and relevant environmental goals, and validated the role of SLLs as a tool for positive change in the healthcare sector. HSBC acted as one of the mandated lead arrangers, bookrunner and sustainability coordinator on that deal.

The syndicated financing built on the success of EC Healthcare’s debut HK$700 million SLL in 2022. That deal was designed and funded by HSBC, which acted as sole lender and sustainability structuring bank. It was the first SLL arranged for a healthcare services provider in Hong Kong.

The SLL facilities provide a reduced interest margin if defined sustainability targets are met, giving the company a financial incentive to meet its ESG ambitions and connecting its ESG commitments directly with its cost of capital.

As the first syndicated deal of its kind in the city’s healthcare sector, HSBC’s global expertise in sustainable finance was important in ensuring that the financing included appropriate targets for EC Healthcare.

EC Healthcare is now looking to bring its formula for sustainable growth to a wider audience and help establish Hong Kong as a healthcare services hub in the Greater Bay Area.

The group’s 2030 strategy underlines its belief that its ESG policies are a competitive strength, with defined targets that are aligned with the UN’s Sustainable Development Goals.

By aligning its finances with its ESG goals, EC Healthcare has reinforced its commitment to sustainability and sent a strong message to its employees, stakeholders and potential customers.

Today HSBC finances a number of industries that significantly contribute to greenhouse gas emissions. We have a strategy to help our customers to reduce their emissions and to reduce our own. For more information visit www.hsbc.com/sustainability.