HSBC Global Asset Management has announced the launch of three sustainable equity ETFs, with three more to follow, seeking to offer sustainable investing with "cost-efficient exposure".
The first three ETFs to be listed on the London Stock Exchange today (5 June) are the HSBC Europe Sustainable Equity UCITS ETF, the HSBC Japan Sustainable Equity UCITS ETF and the HSBC Sustainable Equity UCITS ETF, with developed world, emerging markets and Asia Pacific ex Japan iterations to follow.
Each ETF will track one of the newly created FTSE Russell ESG Low Carbon Select indices, designed by FTSE Russell in collaboration with HSBC GAM, and will seek to achieve a 20% ESG score uplift, a 50% carbon emissions reduction and a 50% fossil fuel reserves reduction, compared with their respective parent indices.
A custom exclusion list based on UN Global Compact Principles will also be utilised in the country and sector neutral indices.
Olga De Tapia, head of ETF sales at HSBC GAM, said: "Our new ETF range takes a step beyond traditional sustainable ETF product by tracking indices, developed by FTSE Russell, that follow an innovative three-tilt approach.
"Due to the evolution of the energy industry, the indices aim to capture stocks with lower fossil fuel reserves intensity, including alternative energy companies."
Xavier Desmadryl, global head of ESG research at HSBC GAM, added: "We seek to encourage all companies held in our portfolios to establish and maintain high levels of transparency, particularly in their management of ESG issues and risks.
"Engagement with these companies is an important element in both our ESG integration and our stewardship oversight.
"These foundations are the driving force behind our new sustainable equity ETFs, which will provide investors with a core sustainable building block for their portfolios."
Stephane DeGroote, managing director, head of ETFs and derivatives, EMEA at FTSE Russell, said: "FTSE Russell worked closely with HSBC Global Asset Management to develop bespoke indexes that integrate ESG ratings, carbon emissions and reserve considerations, paving the way for a new generation of ETFs.
"The index construction is complemented by a robust and traceable ESG scoring methodology. These ETFs enable investors to participate in the transition towards a low carbon economy, while also balancing governance, social and environmental concerns."