HSBC Global Asset Management (GAM) has unveiled a range of six sustainable ETFs covering different regions of the world
The HSBC Europe Sustainable Equity UCITS ETF, the HSBC Japan Sustainable Equity UCITS ETF and the HSBC USA Sustainable Equity UCITS ETF, were listed on the London Stock Exchange today (5 June), and three further launches exposed to the developed world, Emerging Markets and Asia Pacific ex Japan, are planned for the coming weeks, while the group also plans to expand the listings across key European markets.
HSBC GAM has wider plans to grow its ETF business and also incorporate ESG factors into its investment decisions to support the transition to a more sustainable economy and society.
Xavier Desmadryl (pictured), global head of ESG research at the group, commented: “Investors’ desire to initiate change through sustainable investing continues to grow and long-term equity returns are increasingly driven by companies that effectively implement strong environmental, social and governance practices.
“We seek to encourage all companies held in our portfolios to establish and maintain high levels of transparency, particularly in their management of ESG issues and risks. Engagement with these companies is an important element in both our ESG integration and our stewardship oversight. These foundations are the driving force behind our new sustainable equity ETFs, which will provide investors with a core sustainable building block for their portfolios.”
The sustainable ETF range will track the newly created FTSE Russell ESG Low Carbon Select Indices, developed and customised in collaboration with FTSE Russell. The funds will aim to achieve a 20% ESG score uplift, and has two specific aims regarding their carbon exposure; a 50% carbon emissions reduction and a 50% fossil fuel reserves reduction2, relative to the parent index.
The indices also incorporate a custom exclusion list based on UN Global Compact Principles and other sustainability factors.
Olga De Tapia, global head of ETF sales at HSBC GAM, added: “Our new ETF range takes a step beyond traditional sustainable ETF products by tracking indices, developed by FTSE Russell, that follow an innovative three-tilt approach. This approach allows us to capture the benefits of positive inclusion and access companies that are transitioning towards a lower carbon economy.
“Due to the evolution of the energy industry, the indices aim to capture stocks with lower fossil fuel reserves intensity, including alternative energy companies. The indices’ target of a 50% reduction on fossil fuels reserves allows them to include those companies that are at the forefront of this transition.”
