Responsible investing
We aim to incorporate environmental, social and governance (ESG)¹ factors into our investment decisions to generate sustainable, long-term returns.
ESG factors can have a material impact on a company’s long-term performance. Put simply, we believe companies that conduct their business in a responsible and sustainable way are more likely to deliver long-term value.
Over the last twenty years we have developed our approach to responsible investment, launching our first Socially Responsible Investment fund in 2001 and becoming an early signatory of the UN Principles of Responsible Investment (UNPRI) in 2006. Since then, we have seen a growing interest from investors keen to understand how ESG issues can create and protect long term value.
Responsible investing is integral to our investment philosophy and approach. We invest in, and engage with, companies and governments committed to long-term returns. This is why evaluating how companies and governments manage their impact on the environment, their relationships with stakeholders, and their operations enables us to identify potential risks and opportunities which financial markets may not price appropriately.
Our ambition is to be a leader in responsible investment, driving the transition to a more sustainable economy for the long-term benefit of our clients and society.
As at 31 March 2021:
Responsible Investment AUM: Assets managed according to at least one or more of the GSIA² seven styles of sustainable investing – USD 569 billion
- Client-led exclusions³: Intentionally avoiding investments in companies, issuers, sectors or countries based on criteria related to potential negative sustainability outcomes or particular issues of concern – USD 4.4 billion
Sustainable Investment AUM: All dedicated sustainably invested assets which are managed according to the definitions below in addition to ESG integration, corporate engagement and shareholder action – USD 12.1 billion
- ESG Enhanced: Covers the spectrum of approaches (e.g. ESG tilting, positive screening) to intentionally invest in companies based on relative ESG performance or momentum – USD 6.8 billion
- Thematic: Actively investing in ESG related growth areas and trends, by seeking out companies or sectors that align with specific sustainable outcomes – USD 4.7 billion
- Impact: Investing with proof of intent to deliver a direct, positive and measurable impact on society and/or the environment – USD 0.6 billion
Other: Assets where we do not yet formally implement at least one of the GSIA seven styles of sustainable investing – USD 52 billion
Responsible Investment Policy
Our Responsible Investment Policy sets out our ambitions and our approach to responsible investment, how we implement our commitment to the UNPRI across our business, and describes how we meet the requirements of the EU Sustainable Finance Disclosure Regulation (SFDR). In addition, our Responsible Investment Implementation Procedures set out the approach we take to identify and respond to principal adverse sustainability impacts and how we consider ESG sustainability risks as these can adversely impact the securities our funds invest in.
Further detail on our approach and commitments is available in the ‘Policies’ section
¹ ESG refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or country.
² Global Sustainable Investment Alliance
³ One additional negative exclusion only alongside firm-wide exclusions is not sufficient to be included in Sustainable Investment AUM. This figure includes our multi-asset funds which can include investment in HSBC Asset Management funds.
Source: HSBC Asset Management, 31 March 2021
y