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Mother and daughter gardening together; image used for HSBC Spotlight on ESG Sustainable investing.

Spotlight on ESG: Sustainable investing

Create a better tomorrow, starting today

What is ESG?

Environmental, Social and Governance, or ESG, is a set of criteria that can be applied to how a company operates. When we talk about ESG investing, we're referring to the use of these criteria as factors impacting investment decisions and evaluating potential companies to add to your financial portfolio.

Sustainability is the cornerstone of ESG investing. The global economy is putting a spotlight on responsible investment, an approach to developing sustainable investment solutions that are focused on longer term wins shaped by ESG principles. HSBC has spent the last over 150 years serving the needs of a constantly evolving globalised world. We are committed to the ultimate cause of sustainability because we're dedicated to the communities and societies in which we operate, and to that cause, we champion building a better tomorrow for future generations to come.

Today, our sustainability strategy focuses on 3 main areas:

  1. Sustainable finance
  2. Sustainable supply chains
  3. Employability and financial capability

Why does ESG matter?

The financial world is getting increasingly plugged in to ESG development and as a result, we're seeing more and more companies incorporating ESG principles into their operations, instead of purely focusing on profitability. On an individual level, integrating ESG into your investment decisions creates a more resilient portfolio that will stand the tides of time. When individual investors, corporates and societies place ESG principles at the forefront, it's a win on all fronts that aims at building a better world and making sure the resources we have today will still be around tomorrow, all while unearthing great opportunities in the process.

We've been seeing tremendous growth in responsible investment, a clear sign that investors and companies are seeing the value of striving for social and environmental responsibility, in a bid to build a more sustainable future. The numbers speak for themselves.

This infographic shows the exponential growth in socially responsible investments from 2014 to 2016 across 4 geographical regions. Australia and New Zealand saw an increase from USD148 billion to USD516 billion, Asia experienced an increase from USD52 billion to USD526 billion, Europe saw an increase from USD10.8 trillion to USD12 trillion, and the US and Canada experienced an increase from USD7.3 trillion to USD9.8 trillion. Altogether, the 4 regions recorded a jump from USD18.3 trillion in 2014 to USD22.9 trillion in 2016.

Source: HSBC Global Asset Management, "Global Sustainable Investment Review", 2016

Examples of common ESG issues

Windy road in the countryside.

Environmental

  • Climate change
  • Air and water pollution
  • Waste management
  • Energy efficiency
  • Water scarcity
Child drawing of family members.

Social

  • Human rights
  • Consumer privacy
  • Gender equality
  • Data security
  • Health and safety
Women working together in a coworking office.

Governance

  • Board structures
  • Company ownership
  • Financial reporting
  • Business ethics and culture
  • Executive remuneration

Reasons to consider ESG factors when investing

  1. Mitigate risks: ESG issues can affect a company's value and financial performance, as well as influence share prices1
  2. Enhance potential returns: Companies with strong ESG metrics are more likely to outperform others2
  3. Provide greater opportunities: Companies that are robust at adapting to changing consumer needs and regulatory requirements are more likely to benefit from competitive advantages in the longer term3

Ways to invest

Unit trusts4
Fund Name
Fund Code Currency Distribution
Risk level Details
HSBC Global Investment Funds - Global Lower Carbon Equity
HCEAU
USD
Accumulation
4 Click here
HSBC Global Investment Funds - Global Lower Carbon Equity
HCEAS
SGD
Accumulation
4 Click here
HSBC Global Investment Funds - Global Lower Carbon Bond

HCBAU

USD

Accumulation

2

Click here
HSBC Global Investment Funds - Global Lower Carbon Bond

HCBAS

SGD

Accumulation

2

Click here
HSBC Global Investment Funds - Global Lower Carbon Bond

HCBSC

SGD

Cash Dividend

2

Click here
HSBC Global Investment Funds - Global Lower Carbon Bond

HCBSR

SGD

Unit Dividend

2

Click here
HSBC Global Investment Funds - Global Lower Carbon Bond

HCBUC

USD

Cash Dividend

2

Click here
HSBC Global Investment Funds - Global Lower Carbon Bond

HCBDR

USD

Unit Dividend

2

Click here
Schroder ISF Global Climate Change Equity

SGCCU

USD

Accumulation

4

Click here
Schroder ISF Global Climate Change Equity
SGCCS

SGD

Accumulation

4

Click here
Schroder ISF Sustainable Multi Asset Income

SSMEA

EUR

Accumulation

2

Click here
Schroder ISF Sustainable Multi Asset Income

SSMEC

EUR

Cash Dividend

2

Click here
Schroder ISF Sustainable Multi Asset Income

SSMSA

SGD

Accumulation

2

Click here
Schroder ISF Sustainable Multi Asset Income

SSMSC

SGD

Cash Dividend

2

Click here
Schroder ISF Sustainable Multi Asset Income

SSMUA

USD

Accumulation

3

Click here
Schroder ISF Sustainable Multi Asset Income

SSMUC

USD

Cash Dividend

3

Click here
Unit trusts4
Fund Name
HSBC Global Investment Funds - Global Lower Carbon Equity
Fund Code HCEAU
Currency USD
Distribution
Accumulation
Risk level 4
Details Click here
Fund Name
HSBC Global Investment Funds - Global Lower Carbon Equity
Fund Code HCEAS
Currency SGD
Distribution
Accumulation
Risk level 4
Details Click here
Fund Name
HSBC Global Investment Funds - Global Lower Carbon Bond
Fund Code

HCBAU

Currency

USD

Distribution

Accumulation

Risk level

2

Details Click here
Fund Name
HSBC Global Investment Funds - Global Lower Carbon Bond
Fund Code

HCBAS

Currency

SGD

Distribution

Accumulation

Risk level

2

Details Click here
Fund Name
HSBC Global Investment Funds - Global Lower Carbon Bond
Fund Code

HCBSC

Currency

SGD

Distribution

Cash Dividend

Risk level

2

Details Click here
Fund Name
HSBC Global Investment Funds - Global Lower Carbon Bond
Fund Code

HCBSR

Currency

SGD

Distribution

Unit Dividend

Risk level

2

Details Click here
Fund Name
HSBC Global Investment Funds - Global Lower Carbon Bond
Fund Code

HCBUC

Currency

USD

Distribution

Cash Dividend

Risk level

2

Details Click here
Fund Name
HSBC Global Investment Funds - Global Lower Carbon Bond
Fund Code

HCBDR

Currency

USD

Distribution

Unit Dividend

Risk level

2

Details Click here
Fund Name
Schroder ISF Global Climate Change Equity
Fund Code

SGCCU

Currency

USD

Distribution

Accumulation

Risk level

4

Details Click here
Fund Name
Schroder ISF Global Climate Change Equity
Fund Code SGCCS
Currency

SGD

Distribution

Accumulation

Risk level

4

Details Click here
Fund Name
Schroder ISF Sustainable Multi Asset Income
Fund Code

SSMEA

Currency

EUR

Distribution

Accumulation

Risk level

2

Details Click here
Fund Name
Schroder ISF Sustainable Multi Asset Income
Fund Code

SSMEC

Currency

EUR

Distribution

Cash Dividend

Risk level

2

Details Click here
Fund Name
Schroder ISF Sustainable Multi Asset Income
Fund Code

SSMSA

Currency

SGD

Distribution

Accumulation

Risk level

2

Details Click here
Fund Name
Schroder ISF Sustainable Multi Asset Income
Fund Code

SSMSC

Currency

SGD

Distribution

Cash Dividend

Risk level

2

Details Click here
Fund Name
Schroder ISF Sustainable Multi Asset Income
Fund Code

SSMUA

Currency

USD

Distribution

Accumulation

Risk level

3

Details Click here
Fund Name
Schroder ISF Sustainable Multi Asset Income
Fund Code

SSMUC

Currency

USD

Distribution

Cash Dividend

Risk level

3

Details Click here

Structured products

Structured products5 are investment products where returns are linked to an underlying asset with pre-defined features such as tenor, currency and payout calculation.

The underlying assets of structured products can include equities, interest rates, commodities, mutual funds and foreign currencies, among others. These underlying assets can be linked to ESG-related strategies.

For more information on the availability of these structures, please contact your Relationship Manager.

Green bonds

A green bond is a bond6 that uses its proceeds solely for the financing or re-financing of green projects. The issuer must also declare the bond to be green and commit to a level of transparency on how the bond's proceeds are used. 

A green bond should be put together in line with the Green Bond Principles (GBPs), a set of voluntary guidelines created by the International Capital Markets Association (ICMA). According to these GBPs, a company does not have to be green to issue a green bond, but all of the bond proceeds have to go towards green or environmental projects. 

For more information on our range of green bonds, please contact your Relationship Manager.

FAQs

Sustainability at HSBC

We're invested in the communities and societies we operate in, and committed to serving the needs of a changing world. This is why we recognise that economic development has to be sustainable so we can start building a better tomorrow today.

Our commitment:

  • Provide USD100bil of sustainable financing and investment by 2025
  • Source 100% of our electricity from renewable sources by 2030, with an interim target of 90% by 2025
  • Establish a Centre for Sustainable Finance to provide thought leadership on climate change and the role of the financial services sector
  • Reduce our exposure to thermal coal and actively manage the transition path for other high-carbon sectors
  • Adopt the recommendations of the Task Force on Climate-related Financial Disclosures to improve transparency

Awards and recognition:

  • 'Best Bank for Sustainable Finance in Asia, Middle East and Western Europe' (Euromoney, Jul 2020)
  • 'World's Best Bank for Sustainable Finance' (Euromoney, Jul 2019)
  • 'Asia's Best Bank for Sustainable Finance' (Euromoney, Jul 2018)
  • Three 'Lead Manager of the Year' awards across social, sustainable and green bond categories (Environmental Finance, Apr 2019)
  • Number one for 'Integrated Provider of Climate Change' for fifth consecutive year (Extel, Jun 2018)
  • 'Most Impressive Financial Institution Green/SRI Bond Issuer' (GlobalCapital, Sep 2018)

We publish regular updated information on our ESG performance. You can find more information about how we do business and how we approach ESG issues and events by visiting https://www.hsbc.com/investors/esg-investors.

More resources

Wind turbine from aerial view; image used for HSBC Building a sustainable future.
 
for more details This link will open in a new window

See how we're doing our part to build a sustainable future.

Hand holding plant; image used for HSBC Personal Instalment Loan.
 
about sustainable investing page This link will open in a new window

Learn more about responsible investment and the opportunities it can create.

Family hiking in the mountain; image used for HSBC Wealth ESG Insights.
 
for more details

Get our take on the world of ESG and sustainable investing.

1 Source: HSBC, Sustainable Investments Introduction Guide, 2020

2 Source: Eccles G.R., Ioannou I. Serafeim G., "The impact of a Corporate Culture of Sustainability on Corporate Behaviour and Performance", Harvard Business School, November 2011

3 Source: International Institute for Sustainable Development, 24 September 2019

4 Please note that HSBC relies on the environmental, social and governance impact measurement criteria reported by third party fund managers and does not conduct its own due diligence in relation to such criteria. 

5 Structured products are available only to Accredited Investors. Other eligibility criteria apply, please visit https://www.hsbc.com.sg/wealth/investments/products/structured-products/ for more details.

6 Bonds are available only to Accredited Investors. Other eligibility criteria apply, please visit https://www.hsbc.com.sg/wealth/investments/products/bonds/ for more details.

7 Source: HSBC Global Research, "ESG Playbook", October 2018

Disclaimer

Please note that there is no guarantee that:

(a) the nature of the ESG impact of an investment will be aligned with any particular investor's ESG impact goals; 

(b) the stated level or target level of ESG impact of an investment will be achieved; or

(c) an investment approach which considers ESG factors will produce returns similar to those which don't consider these factors. Investments which consider ESG factors may diverge from traditional market benchmarks.

This document is for information only and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. The mention of any investment product or class of investment products ("product") should not be construed as representing a recommendation to buy or sell that product, nor does it represent a forecast on future performance of the product. The information contained on this web site is intended for Singapore residents only and should not be construed as a distribution, an offer to sell or a solicitation to buy any product in any jurisdiction where such activities would be unlawful under the laws of such jurisdiction, in particular the United States of America and Canada. The specific investment objectives, personal situation and particular needs of any person have not been taken in consideration. You should therefore not rely on it as investment advice. Any transaction that you decide to make will be one of your own choice and at your own risk.