Responsible Investment 2021
In the last ten years 83 per cent of all disasters were caused by extreme weather and climate-related events, such as floods, storms, and heatwaves.
Climate change is one of the most complex issues facing us today. The impacts include more extreme weather and natural disasters, accelerating biodiversity loss and economic instability. Leading climate scientists have warned that urgent action is needed to curb emissions to avoid catastrophic environmental breakdown resulting in material financial impact on investments.
The landmark Paris Climate Agreement was created to mobilise a global response to the treat of climate change. As a fiduciary, we have a responsibility to understand how climate change impacts the value of our client's investments. Our climate change policy is aimed at increasing the climate resilience of our clients' investments, as well as contributing towards financing the transition to a low-carbon economy.
In 2020, as part of our commitment to developing solutions to support the transition to a lower carbon future, we
- launched the HSBC REGIO Fund which invests in emerging market green bonds and other similar bonds
- created HSBC Pollination Climate Asset Management with the aim to create the world‘s largest capital manager
- expanded our suite of low carbon funds with the launch of seven Sustainable ETFs
Tackling Climate Change
- COP26: great expectations
It might seem forgivable, mid-pandemic as we are, to downplay – even dismiss altogether – the significance of another intergovernmental meeting on climate change. After all, this year’s UN ‘Conference of the Parties’ will be the 26th occasion that the world’s sovereign nations, including the host, the UK will have met, together with the EU and many other regional blocs and ad hoc and progressive alliances, to negotiate a road map that will hopefully put us on a new climate trajectory. These negotiations will play out in Glasgow next November under the watchful gaze of some anticipated 30,000 attendees, including a myriad groups of official observers, from IGOs and NGOs to numerous faith-based organisations.
- New commitments to natural capital investing
HSBC Asset Management has for many years offered clients the opportunity to invest to help combat climate change. But the world is facing dual threats, not just climate change but also significant bio-diversity loss. Natural capital is being destroyed at an unprecedented rate, with significant negative consequences such as bio-diversity collapse, climate change, localised temperature rise, soil loss, and the spread of diseases: indeed the covid-19 global recession may be due to our encroachment on the natural world.
- Green bonds
Green bonds have rapidly developed into a sizeable and important fixed income sub-asset class. Green bonds can offer compelling financial returns and play an important role in the fight to tackle climate change. The first green bond was issued in 2007. For a few years afterwards supply was dominated by multi-lateral development bank, but subsequent issuance broadened to include corporates, financials and sovereigns.
To read our 2021 Responsible Investment Report and know more on our approach click here