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Investing for a sustainable future

The pursuit of sustainability

We believe the needs of the present can be met without compromising the ability of future generations.

Sustainability is a well-established investment theme. Thirty-five years ago, a report entitled ‘Our Common Future’ was published by the United Nations. It highlights that “the pursuit of sustainability requires major changes in international economic relations.”

'The world’s estimated financial needs for achieving the SDGs are between US$5 trillion and US$7 trillion a year1.

Major changes have taken place, spurred by the UN’s 17 Sustainable Development Goals encompassing issues such as energy consumption, social justice, biodiversity, and economic growth.

We help clients understand the environmental, social, and governance (‘ESG’) implications of investments, combining their financial objectives with their sustainability preferences. Providing expertise, tools and access to sustainable investment solutions.

Today, sustainable investment is going mainstream, with more investors focusing on generating long-term financial returns while contributing positively to the environment and society.

There is much still to be done. We support our clients on their sustainability journey.

Sustainability opens up a world of opportunity

Sustainable investing is no longer considered the choice of specialist investors and has become mainstream. Enjoying recent rapid growth and opening up a world of opportunity for investors who look to benefit from the long-term growth that companies with strong ESG credentials can provide.

HSBC believes the transition to a sustainable economy is a multi-decade investment opportunity

Evidence shows that companies with better Environmental, Social and Governance (ESG) credentials were more likely to show high profitability.2 Companies that manage ESG risks create value for stakeholders and are more likely to survive economic cycles.

The graph below shows the relative performance of the MSCI ACWI index compared to the MSCI ESG leaders index over the five-year period to Jan 2024.

ESG equity index outperformed the wider market

Past performance is not a reliable indicator of future performance.

Source: Bloomberg, HSBC Global Private banking and wealth, Jan 2024

1 Source: UNA-UK, sustainablegoals.org.uk 

2 Source: NYU Stern: Centre for Sustainable Business: ESG And Financial Performance: Uncovering the Relationship by Aggregating Evidence from 1,000 Plus Studies Published between 2015 – 2020 

 

Integrating ESG in a diversified portfolio

Our sustainable investing approach starts with understanding your financial objectives.

We see three main ways to embed sustainability into an investment portfolio, which can be applied across portfolio allocations:

ESG Enhanced: Investment products that follow specific ESG criteria

Range of investment products: Funds/ETFs, Discretionary, Alternatives, Equities and Corporate Bonds, Sustainability Linked Bonds, Structured Products

For example, a carbon related managed strategy, a minimum 30% improvement in carbon related metric compared to non-ESG benchmark or initial investment universe; or a financial instrument that has a top ESG score ranking within the sector.

Thematic: Investment products that focus on ESG related growth areas by identifying companies aligned to specific sustainable themes

Range of investment products: Funds/ETFs, Discretionary, Alternatives, Equities, Structured Products

For example, a financial instrument or an investment product that focuses on sustainability themes such as renewable energy, energy transition, gender equity and diversity, with relevant criteria that outline how the investment would align to the theme. This can be assessed based on their revenue exposure or operational-related metrics.

Impact: Investment products that aim to have a direct, positive impact on society, environment or both. There are clearly pre-defined measurable impact targets and are subject to periodic impact reporting

Range of investment products: Funds/ETFs, Discretionary, Alternatives, Structured Products, Green, Social and Sustainability bonds.

For example, impact investing requires identification of the positive impact intent (e.g. the use of proceeds is defined for green bonds) and the metric(s) must be clearly linked to a sustainability-focused outcome.

Note: Subject to product availability by markets

To support our clients in their sustainability journey, we offer a full range of ESG, sustainable and impact investing products:

Managed Solutions

Sustainable investing funds, ETFs, discretionary mandates & alternatives investments

Capital Markets

Fixed Income (such as Green, Social, Sustainability, Sustainability-Linked bonds), Equities, Structured Products

Research & Insights

Comprehensive coverage of ESG insights publications

Group Solutions

Access to commercial banking, global markets and asset management capabilities

Wind Turbines

Speak to your Relationship Manager to find out

more about HSBC ESG and Sustainable Investing

HSBC Group Industry initiatives

2001

Joined the UK Sustainable

and Finance Association

2006

Signatory to the Principles

for Responsible Investment

2007

Joined Institutional Investors Group on Climate Change

2015

Signatory to the Montreal Carbon Pledge

2017

Launched ClimateAction100+ initiative in collaboration with other investors

2019

Founding member of One Planet Asset Manager Initiative supporting the One Planet Sovereign Wealth Fund Working Group

2020

Founding signatory of the Finance for BiodiversityPledge

2021

Founding member of Finance to Accelerate the Sustainable Transition infrastructure (FAST- Infra) Signatory of the Net Zero Asset Managers Initiative

HSBC Group Awards & Recognition

HSBC is committed to publishing regularly updated information on its ESG performance. The achievements have been recognised in receipt of awards including:

HSBC Global Research

award winning Climate Change Centre of Excellence

‘Middle East’s Best Bank for Sustainable Finance’

(Euromoney, 2019, 2020, 2021)

Improved MSCI ESG rating to AA

(‘ESG Leader’), recognising our strong corporate governance and commitment to sustainable finance (2021)

Western Europe’s Best Bank for Sustainable Finance’

(Euromoney, 2020)

‘World’s Best Bank for Sustainable Finance’

(Euromoney, 2019, 2020)

Five ‘Lead Manager of the Year’

awards across social, sustainability and green bond categories (Environmental Finance, 2020)

‘Asia’s Best Bank for Sustainable Finance’

(Euromoney, 2019, 2020, 2021, 2022, 2023)

ESG Investing Product/Services Excellence Award

(Bloomberg Bizweek 2022, 2023) 

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