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June 8, 2020

HSBC GAM rolls out sustainable ETFs

HSBC Global Asset Management (HSBC GAM) has launched a range of sustainable equity ETFs in Europe, which will offer exposure to companies with low carbon profiles.

Listed on the London Stock Exchange, the suite comprises three ETFs.

These are the HSBC Europe Sustainable Equity UCITS ETF, the HSBC Japan Sustainable Equity UCITS ETF and the HSBC Sustainable Equity UCITS ETF.

Plans are on to list three more ETFs soon which will provide exposure to the developed world, emerging markets and Asia-Pacific ex-Japan.

The strategies will track FTSE Russell ESG Low Carbon Select indices, designed by FTSE Russell in alliance with HSBC GAM.

The indices aim for a 50% carbon emissions reduction, 50% fossil fuels reserves reduction, as well as 20% ESG score uplift relative to the parent index.

FTSE Russell managing director, head of ETFs and derivatives, EMEA, Stephane DeGroote said: “FTSE Russell worked closely with HSBC Global Asset Management to develop bespoke indexes that integrate ESG ratings, carbon emissions and reserve considerations, paving the way for a new generation of ETFs.

“The index construction is complemented by a robust and traceable ESG scoring methodology.”

Besides, the methodology considers country neutrality and sector neutrality, while incorporating a custom exclusion list based on UN Global Compact Principles.

HSBC GAM head of ETF sales Olga De Tapia said: “Our new ETF range takes a step beyond traditional sustainable ETF product by tracking indices, developed by FTSE Russell, that follow an innovative three-tilt approach.

“Due to the evolution of the energy industry, the indices aim to capture stocks with lower fossil fuel reserves intensity, including alternative energy companies.”

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