HSBC Asset Management launches first biodiversity screened ETF
11 August 2022 – HSBC Asset Management (HSBC AM) has launched the HSBC World ESG Biodiversity Screened Equity UCITS ETF, the first of its kind1.
The fund aims to provide both wholesale and institutional investors with a tool to build biodiversity considerations into their portfolios by investing in companies that have stronger biodiversity credentials. The fund meets Article 8 Sustainable Finance Disclosure Regulation (SFDR) classification.
The fund tracks the Euronext ESG Biodiversity Screened Index series which were jointly developed by HSBC, Euronext and Iceberg Data Lab (IDL). These were the first investable biodiversity screened benchmark indices based on a broad range of equities. The parent index is the Euronext World Index.
The fund applies three exclusionary biodiversity filters:
- Socially Responsible Investment (SRI) filter built to include biodiversity considerations e.g. pesticides, hunting, whaling etc.2
- Negative ESG screening removing the worst 25 per cent of constituents using Sustainalytics risk performers methodology
- IDL Corporate Biodiversity Footprint uplift of around 35 per cent versus the parent index
IDL’s Corporate Biodiversity Footprint (CBF) methodology uses Mean Species Abundance3 for its biodiversity score and assesses four of the most material pressures on biodiversity - climate change, land use, air pollution and water pollution.
Following the filters, the ETF will consist of the top 500 companies that perform the best in terms of the Corporate Biodiversity Footprint and Sustainalytics ESG risk score, whilst not participating in any of the exclusionary actions applied by the enhanced socially responsible investing (SRI) filter.
Comprehensive biodiversity data does not yet exist in full, meaning there is currently a need for multiple screens which capture biodiversity risks. As data availability and quality improves the screening methodology will continually be enhanced by HSBC AM’s Responsible Investment team.
Olga de Tapia, Global Head of ETF and Indexing Sales, HSBC AM said: “This ETF is the newest in our suite of sustainable building blocks we have been innovating for investors, to help them create portfolios that address material environmental issues such as biodiversity and climate change.
“We have a huge part to play in the protection and preservation of biodiversity which can be achieved through ‘biodiversity aware’ investment processes and this ETF is hopefully a step in combatting the biodiversity crisis.”Patrick Kondarjian, Global Head of ESG Sales, Markets & Securities Services, HSBC, added: “We’re pleased to have helped HSBC AM create the world’s first ETF that tracks the Euronext ESG Biodiversity Screened World USD Index. The index is part of the first range of investable biodiversity screened Equity benchmark indices, allowing investors to take into account the impact of companies on nature in addition to traditional ESG risk metrics.”
Fund Name | ISIN | Stock exchange | Bloomberg ticker | Benchmark | Total expense ratio (TER) |
---|---|---|---|---|---|
HSBC World ESG Biodiversity Screened Equity UCITS ETF | IE0002UTLE51 |
London Stock Exchange (LSE) | HBDV LN | Euronext ESG Biodiversity Screened Index | 0.35 per cent |
- Source: Bloomberg, August 2022
- The enhanced ESG filters excludes all companies with any involvement in pesticide production, palm oil, animal testing, small arms, meat usage and other specific environmental supply chain incidents
- The Mean Species Abundance (MSA) metric is an indicator of local biodiversity intactness. MSA measures native species in a delimited space relative to undisturbed ecosystems (per cent), this is a reference metric used by the Intergovernmental Panel on Climate Change (IPCC), the Conventions on Biological Diversity (CBD) and the United Nations (IPBES)
Media enquiries to:
Mat Barling + 44 (0) 738 479 4295 mathew.barling@hsbc.com
Notes to editors
For journalists only and should not be distributed to or relied upon by any other persons.
Approved for issue in the UK by HSBC Global Asset Management (UK) Limited, which is authorised and regulated by the Financial Conduct Authority.
www.assetmanagement.hsbc.com/uk
Copyright © HSBC Global Asset Management (UK) Limited 2022. All rights reserved.
Notes to investors
The information contained in this press release does not constitute an offer or solicitation for, or advice that you should enter into, the purchase or sale of any security or fund. Any views expressed are subject to change at any time.
This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe to any investment.
Any views expressed were held at the time of preparation and are subject to change without notice. While any forecast, projection or target where provided is indicative only and not guaranteed in any way. HSBC Global Asset Management (UK) Limited accepts no liability for any failure to meet such forecast, projection or target. The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested. Where overseas investments are held the rate of currency exchange may also cause the value of such investments to fluctuate.
Investments in emerging markets are by their nature higher risk and potentially more volatile than those inherent in some established markets.
Detailed information for article 8 and 9 sustainable investment products, as categorised under the Sustainable Finance Disclosure Regulation (SFDR), including; description of the environmental or social characteristics or the sustainable investment objective; methodologies used to assess, measure and monitor the environmental or social characteristics and the impact of the selected sustainable investments and; objectives and benchmark information, can be found at:
Sustainable Investment products
HSBC Asset Management
HSBC Asset Management should be referred to either in full or as HSBC AM to avoid confusion with any other financial services firms.
HSBC Asset Management, the investment management business of the HSBC Group, invests on behalf of HSBC’s worldwide customer base of retail and private clients, intermediaries, corporates and institutions through both segregated accounts and pooled funds. HSBC Asset Management connects HSBC’s clients with investment opportunities around the world through an international network of offices in around [enter amount] countries, delivering global capabilities with local market insight. As at 30 June 2022, HSBC Asset Management managed assets totalling USD595 billion on behalf of its clients. For more information see http://www.global.assetmanagement.hsbc.com/
HSBC Asset Management is the marketing name for the asset management businesses of HSBC Holdings plc.
Detailed information for article 8 and 9 sustainable investment products, as categorised under the Sustainable Finance Disclosure Regulation (SFDR), including; description of the environmental or social characteristics or the sustainable investment objective; methodologies used to assess, measure and monitor the environmental or social characteristics and the impact of the selected sustainable investments and; objectives and benchmark information, can be found at: Sustainable Investment products
HSBC Holdings plc
HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 63 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of USD2,985 billion at 30 June 2022, HSBC is one of the world’s largest banking and financial services organisations.