The Hong Kong and China Gas Company Limited (Towngas) and HSBC have signed an agreement under the newly launched Towngas Green Supply Chain Finance Programme marking the first sustainability-linked supplier payment solution by a utility company in Greater China.
The Programme initially targets Towngas’ suppliers in its appliance sales and installation sectors, aiming to foster decarbonisation throughout its value chain. By collaborating with banks, the Programme offers suppliers favourable borrowing rates if they meet specific ESG criteria. This initiative will enhance Towngas’ ability to gather Scope 3 greenhouse gas emissions data, aligning with the Hong Kong Stock Exchange’s new Climate-related Disclosures framework.
The Programme enables suppliers to receive early payments for materials, services, or contracted work upon meeting established sustainability performance indicators related to emissions management, disclosure, and occupational health and safety. This not only improves their cash flow and financing but also promotes broader integration of ESG practices into their operations. Towngas will also offer ESG training to participating suppliers, contributing jointly to a sustainable, low-carbon future.
Felix Lee, Head of Group ESG / Head of Group Corporate Affairs of Towngas, said, “By linking sustainability performance to payment services, we hope to take on a larger role in further encouraging suppliers to improve their ESG management standards and jointly promote the sustainable transformation of the industry chain. Moreover, as ESG disclosure regulations evolve, we hope the Programme will lay an important foundation for collecting our Scope 3 greenhouse gas emissions data.”
Aditya Gahlaut, Managing Director and Co-Head of Global Trade Solutions, Asia Pacific, HSBC, said, “Through the use of sustainable supply chain finance, we are able to have a positive impact across the full value chain. We promote ESG transparency, encourage disclosure and incentivise suppliers who manage and report their emissions.”
Towngas ensures all suppliers adhere to ESG requirements set out in the Code of Practice for Suppliers, monitors ESG-related risks, and works with suppliers to enhance their ESG performance.