Governance

HSBC’s asset management arm launches two lower carbon funds

Banking giant’s funds subsidiary has been raising its responsible investment profile

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Fresh from helping to ‘soft launch’ the Climate Action 100+ investor climate initiative at PRI in Person last week, HSBC Global Asset Management has today unveiled two lower carbon funds.

The funds are the HSBC GIF Global Lower Carbon Equity Fund and the HSBC GIF Global Lower Carbon Bond Fund and the company says they aim to address climate-related investment risk using “robust composite carbon data” to achieve a lower carbon portfolio than their respective reference benchmark.

HSBC Global Asset Management is the fund management business of the HSBC Group; it has US$447bn in assets under management.

“We have seen increasing demand from investors for products that take a climate risk-based approach as part of their core holdings, and our two new funds do just that,” said Melissa McDonald, Global Head of Product – Equity and Responsible Investment at HSBC Global Asset Management.

HSBC says that every portfolio holding will have its carbon footprint assessed “pre-purchase” so that the total carbon footprint of the portfolio “can be managed and reduced”.The funds arm has been ramping up its sustainable investments capability recently. It has hired former Newton Head of RI (and PRI Board Member) Sandra Carlisle, Stephanie Maier from Aviva Investors and Helene Winch, the former Director of Policy and Research at the PRI.

Maier was one of the investor figures that presented the new investor campaign targeting ‘Systemically Important Carbon Emitters’ (SICEs) at the PRI in Berlin while Winch was a moderator of one the main asset owner panels at the event.

At the parent level, Daniel Klier, HSBC’s Group Head of Strategy and Global Head of Sustainable Finance, is also a member of the UK’s new Green Finance Taskforce. And the bank also held a session at Climate Week in New York last month which featured French minister Brune Poirson.

Speaking at the COP21 in Paris in December 2015, HSBC’s Group CEO Stuart Gulliver spoke of helping clients achieve a “just and orderly transition” to a low carbon economy – although he didn’t agree that fossil-fuel dependent sectors should be left behind.

At the World Economic Forum a month later, he spoke of the moral and business imperative of green financing.