Aegon HSBC Developed World Sustainable Equity Index Pn
SRI Style:
Environmental Style
SDR Labelling:
-
Product:
Pension
Fund Region:
Global
Fund Asset Type:
Passive Equity
Launch Date:
19/01/2021
Last Amended:
Dialshifter (
):
Fund Size:
£m
ISIN:
GB00BN094G19
Sustainable, Responsible
&/or ESG Overview:
This pension product is linked to the "HSBC Developed World Sustainable Equity Index" fund. The following information refers to the primary fund
The Fund aims to provide returns by tracking the performance of the FTSE Developed ESG Low Carbon Select Index (the “Index”) before the deduction of charges.
The Fund will invest directly in shares of all of the companies that make up the Index and in the same or very similar proportions in which they are included in the Index. However, there may be circumstances when it is not possible or practical for the Fund to invest in shares of all the companies of the Index. The Fund’s performance is measured against the Index, because the Fund intends to track the performance of the Index. The Index is net of tax that applies to UK funds. The Index seeks to achieve a reduction in carbon emissions and fossil fuel reserves exposure and an improvement of the FTSE Russell ESG rating against that of the benchmark.
Primary fund last amended:
Information directly from fund manager.
Fund Filters
Sustainability - General
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
Find funds which substantially focus on sustainability issues
Find funds where there is a significant emphasis on (environmental and social) sustainability. Funds with a 'sustainability theme' typically place more emphasis on the area than funds with a 'sustainability policy' - meaning that it is more likely to drive investment selection. Strategies vary. See fund information for further detail.
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Environmental - General
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
Funds that aim to invest in companies with strong or market leading environmental policies and practices. Strategies vary - in particular the balance between 'financial' aspects and environmental benefits. Some may invest substantially in solutions or 'positive impact' companies - others may invest in more conventional companies providing certain environmental criteria are met. See fund information for further detail.
Climate Change & Energy
Funds that have policies (documented strategies that explain their position on) climate change related issues such as greenhouse gas/carbon emissions, net zero, transitioning to lower carbon. Strategies vary. Read fund details for further information.
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details.
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Find funds that have policies which say they avoid or limit their investment in the nuclear industry. Strategies vary. See fund information for further detail.
Ethical Values Led Exclusions
Find funds that have policies that set out their position on ethical or 'personal values' based issues. Strategies vary. See fund information for further detail.
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information.
Governance & Management
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity
Fund Governance
Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature.
Asset Size
Find funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
Find funds that have SRI strategies and focus their investment stock selection on larger companies. (e.g. over circa £5-£10bn)
How The Fund Works
Find funds with few exclusions - typically for example exclude tobacco or companies that breach commonly adopted standards or norms such as the UN Global Compact.
Find funds that invest more heavily in those that have higher ESG ratings/standards or scores and less heavily in companies with lower ESG ratings. Where this is central to a fund's strategy you should expect it to invest in most sectors. Strategies vary.
Find funds that make stock selection (and ongoing fund management) decisions based on ESG data or company ratings (normally supplied by third parties) rather than focusing on what individual companies do, how they operate or their plans for the future
Find funds that use an investment index to direct where they can invest. Fund strategies and indices vary. See fund details and index used.
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Find funds that have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
Intended Clients & Product Options
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Fund Management Company Information
About The Business
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
Find fund management companies that actively encourage higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Find fund managers that vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' demonstrating their support for or disagreement with management policy. (*situations can legitimately, occasionally occur where voting proves impossible, but in principle all shares should be voted.)
Find fund managers that consider responsible ownership and ESG to be a key differentiator for their business.
The leadership team of this asset manager have performance targets linked to environmental goals.
Find fund management companies that aim to align all their investments (across all funds) to help meet the aims of the UN Sustainable Development Goals.
Find funds run by fund managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
Find fund management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
Find fund management companies that encourage the companies they invest in to have strong diversity, race, gender and other equality policies across all assets held, not simply screened or themed SRI/ESG funds. (ie Asset Management company wide).
Collaborations & Affiliations
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
Find fund management companies that are members of UKSIF - the UK Sustainable Investment and Finance association
This asset manager has signed up to the UNEP (United Nations Environment Program) program which aims to encourage more responsible banking practices – focused on environmental and social issues.
A member of the Taskforce for Nature Related Financial Disclosures group which aims to aid risk management and shift money towards nature-positive outcomes.
Resources
Find fund management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Find a fund management company that directly employs specialist ESG/SRI/sustainability researchers or analysts. This allows asset managers to discuss environmental, social and governance risks and opportunities directly with companies.
Find fund management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors.
Accreditations
Finds organisations / fund managers that have an A+ PRI rating - meaning they are highly rated according to the 'Principles of Responsible Investment'
Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave like responsible, typically longer term 'company owners'.
Engagement Approach
Find fund management companies that regularly initiate or run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
Company Wide Exclusions
Find fund management companies (not funds) that avoid investment in 'controversial weapons' across all of their funds and other investment vehicles.
Find funds / fund managers that are reviewing, or have reviewed, their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. (Typically with reference to climate change.)
This asset manager has a strategy in place that will lead them to exit direct investments in the coal mining industry. Managers ability to do this may depend on the geographic regions in which they invest.
Climate & Net Zero Transition
Fund management organisations that have pledged to reduce their greenhouse gas emissions to ‘net zero’. Strategies vary - this area is changing rapidly.
This asset management company has set a date by which they plan to achieve net zero greenhouse gas / CO2e emissions.
Find fund management companies that are working with the companies they invest in to encourage reductions in carbon dioxide and other greenhouse gas emissions.
This asset management company plans to achieve net zero greenhouse gas (CO2e) emissions by reducing their emissions. Calculations and scope vary.
Finds organisations / fund management companies that are in the process of working out how to make a ‘net zero commitment’ - meaning that when that is finalised they will have started the process of reducing their total greenhouse gas emissions to'zero'.
Transparency
Find fund management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Find companies that publish information about their sustainable and responsible investment strategies on their company website.
Fund management companies that publish a full record of how they vote their shares at AGMs (annual general meetings) and EGMs (extraordinary general meetings). Voting strategies have an important role to play encouraging higher environmental, social and governance standards.
This asset management company has published a plan that explains how they are to become a sustainable business - without significant negative environmental or social impacts.
Sustainable, Responsible &/or ESG Policy:
The HSBC Developed World Sustainable Equity Index Fund, is ambitious in its approach as it focuses on not just one but three areas of improvement (ESG rating, carbon emissions and fossil fuel reserves intensity reduction), allowing for the underweighting of less desirable stocks without excluding them entirely.
The transition to a lower-carbon economy is underway and our priority is to develop solutions that will enable our clients to participate in this transition. Our partnership with a leading UK insurer is an important milestone in achieving this goal and testament to our expertise in responsible investing.
The Fund targets three areas of improvement – a 20% uplift in ESG score* as well as a 50% carbon emissions and 50% fossil fuel reserves intensity reduction, relative to the parent index. It aims to deliver on these targets without adding risk to the portfolio by keeping tracking error low. It also includes a custom exclusion list based on the following sustainability factors.
- Companies that generate >10% revenues from thermal coal extraction
- Companies where >10% of generating capacity is from thermal coal
- Companies with >25% generating capacity from nuclear
- Companies providing core weapon systems, or components/services of the core weapon system that are considered tailor-made and essential for: anti-personnel mines/nuclear weapons/cluster weapons/biological and chemical weapons/depleted uranium/white phosphorus munitions. As well as companies involved in the development/production/use/maintenance/offering for sale/distribution/import or export/storage or transportation of weapons banned by international convention.
- Companies where >10% of revenues come from tailor-made products and/or services that support military weapons or manufacturing military weapon systems and/or integral, tailor-made components for these weapons
- Companies manufacturing tobacco products at any level of involvement
- Companies found to have violated any of the 10 principles of the UN Global Compact
* As measured by the FTSE Russell ESG Ratings model –
https://www.ftserussell.com/data/sustainability-and-esg-data/esg-ratings
Process:
The fund tracks a benchmark index that employs an exclusionary and tilt based screening approach. The first filter applied is an SRI screen to exclude companies that generate revenue from involvement in controversial industries or sectors or are UNGC violators. A three-way simultaneous tilt based approach is then used to tilt towards companies with better ESG scores, towards companies with a lower carbon intensity profile and towards companies with smaller fossil fuel reserve stockpiles. A combination of FTSE ESG scores, Trucost carbon data and the RepRisk database is used to screen this index.
Resources, Affiliations & Corporate Strategies:
HSBC Asset Management was an early PRI signatory in 2006. As a signatory of the PRI, we work with other investors in leading engagement on a range of issues. We report annually on our responsible investment activities and how UN PRI principles and different ESG aspects are covered as part of our investment processes. We achieved a PRI score of A+ in the 2018, 2019 and 2020 PRI Assessment Report for Strategy and Governance.
In 2010 we made the decision to move our dedicated ESG analysts into our mainstream equity and credit analyst teams in order to further integrate ESG into our mainstream investment processes. Since then, ESG assessments are a core responsibility of all of our portfolio managers and analysts. Our company and issuer level ESG research is undertaken throughout our organisation. All investment staff have sustainable investment responsibilities as part of their investment duties. ESG integration is a core task of all of our equity and credit analysts. The analysts use the research output of our Paris-based ESG research team in their portfolio research and analysis and portfolio managers include ESG considerations within their investment decision-making processes.
We have a dedicated responsible investment specialist team based in London and Paris. Their responsibilities cover our global Responsible Investment strategy and policy as well as the development of investment solutions for our global clients and Responsible Investment implementation. The team also plays an active role in industry engagement and policy and market initiatives to address systemic sustainability challenges. They work very closely with our corporate governance and engagement team based in London and with our ESG research team based in Paris and they work with our portfolio managers and ESG analysts on systemic ESG issues that require system level solutions through market policy and regulation.
We also have a Stewardship team, with members based in London, Paris and Hong Kong, and who work very closely with our investment managers when undertaking our stewardship activities.
We take into account all available company data including ESG factors when making investment decisions across all asset classes and strategies using in-house financial analysis, third party research and data as well as information gathered from company engagement. In addition to our own research we also use third party research and data from the following providers:
- MSCI ESG Research: Intangible Value ESG Assessment, comprehensive ESG assessment and Financial Crime Compliance screening. We use MSCI because their wide coverage of issuers and sector specific methodology
- ISS ESG (formerly ISS Ethix and ISS Oekom): Identifying issuers involved in the production and/or marketing of controversial banned weapons such as cluster munitions and landmine and government bonds' environmental and societal assessment. The specificity of our banned weapons definition can be implemented by ISS as one of the only providers covering government bonds
- Trucost Research: Quantitative environmental data to measure the carbon footprint of companies, issuers and our funds
- Sustainalytics: UNGC compliance and revenues from controversial and sustainable products and activities
- RepRisk: Tracking companies' reputational risk and involvement in ESG-related controversies (implementation in progress). Provides an ongoing view of issuer’s ESG performance, risks, and controversies
- FTSE Green Revenues: Provides revenues breakdown from green activity and its material impact on the bottom line for approximately 3,000 companies
- Carbon4Finance: Measures “carbon emission savings” to help understand a company’s strategic and financial commitment to a low-carbon transition
Collaborative Engagement
We focus on engagement with investee companies but also engage with stakeholders, regulators, industry partners and academics to inform standards and practices that will benefit the long-term interest of our clients.
A combination of the list below, together with local regulators and industry bodies and other institutions, provides an example of where HSBC Group and HSBC Asset Management have memberships and affiliations:
HSBC Asset Management
- UKSIF (the Sustainable and Finance association)
- AFG (Association Française de Gestion Financière) membre de la commission de Corporate Governance
- ORSE (Observatoire pour la Responsabilité Sociétale des Entreprises)
- ICGN (International Corporate Governance Network)
- Eurosif (the European Sustainable Investment Forum)
- FIR (Forum pour l’Investissement Responsable)
- Italian SIF (Italian Forum for Sustainable Finance)
- PRI (Principles for Responsible Investment)
- IIGCC (Institutional Investor Group on Climate Change)
- UK Stewardship Code
- ACGA (Asian Corporate Governance Association)
- Carbon Disclosure Project (CDP)
- Cambridge Institute of Sustainability leadership- ILG
- Council of Institutional Investors
- Global Climate Action 100+
- One Planet Asset Manager Initiative
- Finance for Biodiversity pledge
- Net Zero Asset Managers’ Initiative
HSBC Group
- UN Environment Programme Finance Initiative (UNEPFI)
- UN Global Compact
- Wolfsberg Principles
- OECD Convention on Combating Bribery
- OECD Guidelines for Multinationals
- International Chamber of Commerce Rules of Conduct to Combat Extortion and Bribery
- Global Sullivan Principles
- UN Universal Declaration of Human Rights
- Equator Principles
- Roundtable on Sustainable Palm Oil
- Global Business Coalition on HIV/AIDS
- Carbon Disclosure Project (CDP)
- Extractive s/industries’ Transparency Initiative
- UN Principles for Sustainable Insurance
- Cambridge Institute of Sustainability leadership ILG
- Net Zero Banking Alliance
- Powering Past Coal Alliance (PPCA)
Voting Record
Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
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Aegon HSBC Developed World Sustainable Equity Index Pn |
Environmental Style | - | Pension | Global | Passive Equity | 19/01/2021 | ||
ISIN: GB00BN094G19 |
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Sustainable, Responsible &/or ESG OverviewThis pension product is linked to the "HSBC Developed World Sustainable Equity Index" fund. The following information refers to the primary fund
The Fund aims to provide returns by tracking the performance of the FTSE Developed ESG Low Carbon Select Index (the “Index”) before the deduction of charges. The Fund will invest directly in shares of all of the companies that make up the Index and in the same or very similar proportions in which they are included in the Index. However, there may be circumstances when it is not possible or practical for the Fund to invest in shares of all the companies of the Index. The Fund’s performance is measured against the Index, because the Fund intends to track the performance of the Index. The Index is net of tax that applies to UK funds. The Index seeks to achieve a reduction in carbon emissions and fossil fuel reserves exposure and an improvement of the FTSE Russell ESG rating against that of the benchmark.
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Information received directly from Fund Manager |
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Fund FiltersSustainability - General
Sustainability policy
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
Sustainability focus
Find funds which substantially focus on sustainability issues
Sustainability theme or focus
Find funds where there is a significant emphasis on (environmental and social) sustainability. Funds with a 'sustainability theme' typically place more emphasis on the area than funds with a 'sustainability policy' - meaning that it is more likely to drive investment selection. Strategies vary. See fund information for further detail.
Encourage more sustainable practices through stewardship
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
UN Global Compact linked exclusion policy
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/ Environmental - General
Environmental policy
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
Favours cleaner, greener companies
Funds that aim to invest in companies with strong or market leading environmental policies and practices. Strategies vary - in particular the balance between 'financial' aspects and environmental benefits. Some may invest substantially in solutions or 'positive impact' companies - others may invest in more conventional companies providing certain environmental criteria are met. See fund information for further detail. Climate Change & Energy
Climate change / greenhouse gas emissions policy
Funds that have policies (documented strategies that explain their position on) climate change related issues such as greenhouse gas/carbon emissions, net zero, transitioning to lower carbon. Strategies vary. Read fund details for further information.
Fossil fuel reserves exclusion
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details.
Encourage transition to low carbon through stewardship activity
A core element of these funds will aim to encourage the transition to lower carbon activities through responsible ownership / stewardship / engagement / voting activity
Nuclear exclusion policy
Find funds that have policies which say they avoid or limit their investment in the nuclear industry. Strategies vary. See fund information for further detail. Ethical Values Led Exclusions
Ethical policies
Find funds that have policies that set out their position on ethical or 'personal values' based issues. Strategies vary. See fund information for further detail.
Tobacco and related product manufacturers excluded
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Armaments manufacturers avoided
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Civilian firearms production exclusion
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Gambling avoidance policy
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Pornography avoidance policy
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information. Governance & Management
UN sanctions exclusion
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Encourage higher ESG standards through stewardship activity
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity Fund Governance
ESG integration strategy
Find funds that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature. Asset Size
Over 50% large cap companies
Find funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
Invests mostly in large cap companies / assets
Find funds that have SRI strategies and focus their investment stock selection on larger companies. (e.g. over circa £5-£10bn) How The Fund Works
Limited / few ethical exclusions
Find funds with few exclusions - typically for example exclude tobacco or companies that breach commonly adopted standards or norms such as the UN Global Compact.
ESG weighted / tilt
Find funds that invest more heavily in those that have higher ESG ratings/standards or scores and less heavily in companies with lower ESG ratings. Where this is central to a fund's strategy you should expect it to invest in most sectors. Strategies vary.
Data led strategy
Find funds that make stock selection (and ongoing fund management) decisions based on ESG data or company ratings (normally supplied by third parties) rather than focusing on what individual companies do, how they operate or their plans for the future
Passive / index driven strategy
Find funds that use an investment index to direct where they can invest. Fund strategies and indices vary. See fund details and index used.
Combines norms based exclusions with other SRI criteria
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Combines ESG strategy with other SRI criteria
Find funds that have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
SRI / ESG / Ethical policies explained on website
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies). Intended Clients & Product Options
Intended for investors interested in sustainability
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues. Fund Management Company InformationAbout The Business
Responsible ownership / stewardship policy or strategy (AFM company wide)
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
ESG / SRI engagement (AFM company wide)
Find fund management companies that actively encourage higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Vote all* shares at AGMs / EGMs (AFM company wide)
Find fund managers that vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' demonstrating their support for or disagreement with management policy. (*situations can legitimately, occasionally occur where voting proves impossible, but in principle all shares should be voted.)
Responsible ownership / ESG a key differentiator (AFM company wide)
Find fund managers that consider responsible ownership and ESG to be a key differentiator for their business.
Senior management KPIs include environmental goals (AFM company wide)
The leadership team of this asset manager have performance targets linked to environmental goals.
SDG aligned aims / objectives (AFM company wide)
Find fund management companies that aim to align all their investments (across all funds) to help meet the aims of the UN Sustainable Development Goals.
Responsible ownership policy for non SRI funds (AFM company wide)
Find funds run by fund managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
Integrates ESG factors into all / most (AFM) fund research
Find fund management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
In-house diversity improvement programme (AFM company wide)
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
Diversity, equality & inclusion engagement policy (AFM company wide)
Find fund management companies that encourage the companies they invest in to have strong diversity, race, gender and other equality policies across all assets held, not simply screened or themed SRI/ESG funds. (ie Asset Management company wide). Collaborations & Affiliations
PRI signatory
Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
UKSIF member
Find fund management companies that are members of UKSIF - the UK Sustainable Investment and Finance association
UN Principles of Responsible Banking framework signatory-co wide
This asset manager has signed up to the UNEP (United Nations Environment Program) program which aims to encourage more responsible banking practices – focused on environmental and social issues.
TNFD forum member (AFM company wide)
A member of the Taskforce for Nature Related Financial Disclosures group which aims to aid risk management and shift money towards nature-positive outcomes. Resources
In-house responsible ownership / voting expertise
Find fund management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Employ specialist ESG / SRI / sustainability researchers
Find a fund management company that directly employs specialist ESG/SRI/sustainability researchers or analysts. This allows asset managers to discuss environmental, social and governance risks and opportunities directly with companies.
Use specialist ESG / SRI / sustainability research companies
Find fund management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors. Accreditations
PRI A+ rated (AFM company wide)
Finds organisations / fund managers that have an A+ PRI rating - meaning they are highly rated according to the 'Principles of Responsible Investment'
UK Stewardship Code signatory (AFM company wide)
Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave like responsible, typically longer term 'company owners'. Engagement Approach
Regularly lead collaborative ESG initiatives (AFM company wide)
Find fund management companies that regularly initiate or run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies. Company Wide Exclusions
Controversial weapons avoidance policy (AFM company wide)
Find fund management companies (not funds) that avoid investment in 'controversial weapons' across all of their funds and other investment vehicles.
Review(ing) carbon / fossil fuel exposure for all funds (AFM company wide)
Find funds / fund managers that are reviewing, or have reviewed, their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. (Typically with reference to climate change.)
Coal divestment policy (AFM company wide)
This asset manager has a strategy in place that will lead them to exit direct investments in the coal mining industry. Managers ability to do this may depend on the geographic regions in which they invest. Climate & Net Zero Transition
Net Zero commitment (AFM company wide)
Fund management organisations that have pledged to reduce their greenhouse gas emissions to ‘net zero’. Strategies vary - this area is changing rapidly.
Net Zero - have set a Net Zero target date (AFM company wide)
This asset management company has set a date by which they plan to achieve net zero greenhouse gas / CO2e emissions.
Encourage carbon / greenhouse gas reduction (AFM company wide)
Find fund management companies that are working with the companies they invest in to encourage reductions in carbon dioxide and other greenhouse gas emissions.
Carbon offsetting – do NOT offset carbon as part of net zero plan (AFM company wide)
This asset management company plans to achieve net zero greenhouse gas (CO2e) emissions by reducing their emissions. Calculations and scope vary.
Working towards a ‘Net Zero’ commitment (AFM company wide)
Finds organisations / fund management companies that are in the process of working out how to make a ‘net zero commitment’ - meaning that when that is finalised they will have started the process of reducing their total greenhouse gas emissions to'zero'. Transparency
Publish responsible ownership / stewardship report (AFM company wide)
Find fund management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Full SRI / responsible ownership policy information on company website
Find companies that publish information about their sustainable and responsible investment strategies on their company website.
Publish full voting record (AFM company wide)
Fund management companies that publish a full record of how they vote their shares at AGMs (annual general meetings) and EGMs (extraordinary general meetings). Voting strategies have an important role to play encouraging higher environmental, social and governance standards.
Sustainability transition plan publicly available (AFM company wide)
This asset management company has published a plan that explains how they are to become a sustainable business - without significant negative environmental or social impacts. Sustainable, Responsible &/or ESG Policy:The HSBC Developed World Sustainable Equity Index Fund, is ambitious in its approach as it focuses on not just one but three areas of improvement (ESG rating, carbon emissions and fossil fuel reserves intensity reduction), allowing for the underweighting of less desirable stocks without excluding them entirely. The transition to a lower-carbon economy is underway and our priority is to develop solutions that will enable our clients to participate in this transition. Our partnership with a leading UK insurer is an important milestone in achieving this goal and testament to our expertise in responsible investing. The Fund targets three areas of improvement – a 20% uplift in ESG score* as well as a 50% carbon emissions and 50% fossil fuel reserves intensity reduction, relative to the parent index. It aims to deliver on these targets without adding risk to the portfolio by keeping tracking error low. It also includes a custom exclusion list based on the following sustainability factors.
* As measured by the FTSE Russell ESG Ratings model – https://www.ftserussell.com/data/sustainability-and-esg-data/esg-ratings
Process:The fund tracks a benchmark index that employs an exclusionary and tilt based screening approach. The first filter applied is an SRI screen to exclude companies that generate revenue from involvement in controversial industries or sectors or are UNGC violators. A three-way simultaneous tilt based approach is then used to tilt towards companies with better ESG scores, towards companies with a lower carbon intensity profile and towards companies with smaller fossil fuel reserve stockpiles. A combination of FTSE ESG scores, Trucost carbon data and the RepRisk database is used to screen this index.
Resources, Affiliations & Corporate Strategies:HSBC Asset Management was an early PRI signatory in 2006. As a signatory of the PRI, we work with other investors in leading engagement on a range of issues. We report annually on our responsible investment activities and how UN PRI principles and different ESG aspects are covered as part of our investment processes. We achieved a PRI score of A+ in the 2018, 2019 and 2020 PRI Assessment Report for Strategy and Governance.
In 2010 we made the decision to move our dedicated ESG analysts into our mainstream equity and credit analyst teams in order to further integrate ESG into our mainstream investment processes. Since then, ESG assessments are a core responsibility of all of our portfolio managers and analysts. Our company and issuer level ESG research is undertaken throughout our organisation. All investment staff have sustainable investment responsibilities as part of their investment duties. ESG integration is a core task of all of our equity and credit analysts. The analysts use the research output of our Paris-based ESG research team in their portfolio research and analysis and portfolio managers include ESG considerations within their investment decision-making processes.
We have a dedicated responsible investment specialist team based in London and Paris. Their responsibilities cover our global Responsible Investment strategy and policy as well as the development of investment solutions for our global clients and Responsible Investment implementation. The team also plays an active role in industry engagement and policy and market initiatives to address systemic sustainability challenges. They work very closely with our corporate governance and engagement team based in London and with our ESG research team based in Paris and they work with our portfolio managers and ESG analysts on systemic ESG issues that require system level solutions through market policy and regulation.
We also have a Stewardship team, with members based in London, Paris and Hong Kong, and who work very closely with our investment managers when undertaking our stewardship activities. We take into account all available company data including ESG factors when making investment decisions across all asset classes and strategies using in-house financial analysis, third party research and data as well as information gathered from company engagement. In addition to our own research we also use third party research and data from the following providers:
Collaborative Engagement We focus on engagement with investee companies but also engage with stakeholders, regulators, industry partners and academics to inform standards and practices that will benefit the long-term interest of our clients. A combination of the list below, together with local regulators and industry bodies and other institutions, provides an example of where HSBC Group and HSBC Asset Management have memberships and affiliations:
HSBC Asset Management
HSBC Group
Voting Record |