At HSBC, we believe investing should make a positive difference.
Our investments aren't just figures, charts or money in an account. At a personal level, they reflect our values and aspirations for the world we live in.
We believe that sustainable investing can generate long-term financial returns, whilst making a positive change in the world.
What is ESG Investing?
ESG Investing incorporates environmental, social and governance factors into investment process and decision-making.
How do we categorise ESG funds?
- ESG Aligned
- ESG Enhanced
- Thematic
- Impact Investing
ESG Aligned are managed solutions that have an investment approach guided by relative Environment, Social, Governance (ESG) performance compared to non-ESG benchmark or industry peers. The product name might not carry an ESG term.
Covers the spectrum of approaches (e.g. tilting positive screening) to invest in companies based on relative ESG performance or momentum, compared to non-ESG benchmark or industry peers.
Financial benefits remain a key investment objective.
ESG Enhanced
ESG Enhanced funds are investment products that follow specific ESG criteria.
Covers the spectrum of approaches (e.g. tilting, positive screening) to invest in companies based on relative ESG performance or momentum, compared to non-ESG benchmark or industry peers.
There are specific ESG criteria and requirements of minimum ESG rating/uplift vs mainstream benchmark. Higher ESG performance expectation.
Thematic
Thematic ESG funds are investment products that focus on ESG related growth areas by identifying companies that align to specific sustainable themes.
Intentionally selecting and investing in ESG related growth areas and trends, by seeking out companies or sectors that align with specific sustainable outcomes and/or themes.
Impact Investing
Impact Investing are investment products that aim to have a direct, positive impact on society, environment or both. There are clearly pre-defined measurable impact targets and are subject to periodic impact reporting.
This covers strategies that aim to deliver intentional, direct and positive environment and or social impact.
Such investment opportunities deliver both financial returns alongside environmental and social returns.
How do we know what works?
Our global manager selection team engages with every product provider when assessing firm and product level ESG credentials.
On a firm level, we rigorously review the ESG capabilities of fund management groups, including their ESG credentials, resources, operational processes, policies, oversight and transparency to investors.
On a product level, our evaluation focuses on ensuring that the funds truly demonstrate a commitment to ESG.
Each fund is assessed based on our definition of sustainable investing.
Combining thorough research with portfolio manager interviews, we strive to determine that philosophy, style, process of assessing ESG risks and opportunities and finally, the outcomes achieved are in line with the sustainability objective.
In all of our approaches, we invest for a better future by analysing and taking action today.
It's never been more possible for individuals to make an impact by investing in a better world. Our aim is to help our clients invest in line with their values.