ESG & sustainable investing at HSBC Private Bank (Suisse) SA

ESG stands for ‘Environmental, Social and Governance’. The ‘E’ refers to how companies manage their impact on the environment; the ‘S’ on how companies manage relationships with employees, clients and communities, oversight of the supply chain; health and safety and the ‘G’ relates to how companies are governed.

A sustainable investment refers to an investment in an economic activity that contributes to:

• an environmental (“E”) objective, as measured, for example, by key resource efficiency indicators on the use of energy, renewable energy, raw materials, water, and land, on the production of waste, and greenhouse gas emissions, or on its impact on biodiversity and the circular economy, and / or
• a social (“S”) objective, in particular an investment that contributes to tackling inequality or that fosters social cohesion, social integration, and labour relations, or human capital or economically or socially disadvantaged communities

Additional conditions stipulate that such investments “Do Not Significantly Harm” any of those objectives and that the investee companies follow “Good Governance” practices, in particular with respect to sound management structures, employee relations, remuneration of staff and tax compliance (“G objective”).

Considering Sustainability in your investment decisions allows you to manage ESG risks in your portfolio.

Different organisations may employ various methodologies for classifying ESG and sustainable investing products. HSBC adopts a comprehensive product assessment and classifies products according to the methodology mentioned in the FAQ to define what we consider to be ‘ESG and sustainable investing'.

ESG and sustainable investing is an evolving area and new regulations may come into effect which may affect how an investment is categorised or labelled. An investment which is considered to fulfil ESG and sustainable investing criteria today may not meet those criteria at some point in the future. We will review and update the eligible investment product list from time to time.

More information can be found on the FAQ.

There are many different approaches to investing sustainably, each with its own objectives.

Before you invest sustainably, take the time to understand how sustainable objectives are measured and whether the sustainable objectives align with your objectives and financial goals.

Depending on the sustainable objectives pursued and ESG approaches applied, sustainable investment solutions will embed sustainability to varying degrees.

Commonly used investment approaches to invest sustainably include, ESG integration, exclusion strategies, best-in class strategies, positive screening, thematic investments impact investments and engagement with companies.

Sustainable investing provides a measure for investors to use, to seek and screen the sustainability of investment opportunities arising from the global response to climate change and other sustainability related topics.

As sustainable investing is gaining traction, it's likely to become an important factor for corporate performance, driven by market demand. Investment portfolios may become more resilient and contribute to society as a whole through the inclusion of ESG and sustainable investing. Investors should also note that ESG and sustainable investing solutions do not guarantee higher returns on their portfolios compared to non-sustainable investment solutions and products.