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This Week’s Fund News: HSBC AM Expands Sustainable Equity ETF Range

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including HSBC AM, Ninety One, OnePlanetCapital, Mirova, Omnes and Bank of America. 

HSBC Asset Management has expanded its sustainable equity ETF range with the launch of the HSBC Europe ex-UK Sustainable Equity UCITS ETF. The fund aims to achieve an ESG score improvement of up to 20%, alongside a carbon emission intensity reduction target of up to 50% and a fossil fuel reserve reduction target of up to 50%, relative to the parent index. It is classified as Article 8 under the EU’s Sustainable Finance Disclosure Regulation (SFDR). “Our priority is to provide our clients with a viable means of improving the social, governance and environmental impact of their portfolios,” said Olga de Tapia, Global Head of ETF and Indexing Sales at HSBC AM. This follows the asset manager’s recent enhancement of its Paris-aligned Benchmark (PAB) equity ETF offering. The HSBC MSCI Emerging Markets Climate Paris-Aligned UCITS ETF and HSBC MSCI AC Asia Pacific ex-Japan Climate Paris-Aligned UCITS ETF aim to help investors integrate net zero considerations into their portfolios by targeting companies that are 1.5°C-aligned. Tracking the MSCI Emerging Markets Climate Paris-Aligned benchmark index, they are classified as Article 9 funds under SFDR. “With the addition of these two new ETFs, we’re pleased to provide investors and asset allocators a comprehensive suite of core PAB building blocks,” said de Tapia. 

South Africa-based global asset manager Ninety One has launched its Global Sustainable Equity Strategy, which will complement its existing Global Environment, UK Sustainable Equity and Global Multi Asset Sustainable Growth strategies. “We believe the world’s measure of success is shifting from the zero-sum game – where shareholder value is maximised at the expense of other stakeholders – into a world where considering multiple stakeholders in business decisions creates greater value for all,” said Stephanie Niven, Portfolio Manager for the strategy at Ninety One. The new strategy will invest in sustainability leaders, while ensuring externalities impacting companies’ employees, wider society and the natural world are priced and valued. As well as conducting financial analysis, Ninety One will look for companies that are able to demonstrate they are thinking long-term about their business’s sustainability performance. “It is imperative that we develop solutions to address the challenges investors are facing as the world transitions to a more sustainable growth model,” said Mimi Ferrini, Co-CIO at Ninety One. 

Sustainable investment house OnePlanetCapital has invested in two new start-ups making positive contributions to mitigating the effects of climate change. GoThrift sells second-hand clothing, helping consumers move away from environmentally-damaging fast fashion. Adaptavate produces carbon negative products for the construction industry, including a wallboard made of bio-composite instead of gypsum. By investing, OnePlanetCapital is helping both companies upscale both their business and their impact on carbon emissions. “If investors want genuinely sustainable investments with impact at their core, they need to look outside the ESG traditional markets and at the venture capital space where much of the action is happening,” said Matthew Jellicoe, Co-Founder of OnePlanetCapital. 

France-based sustainable asset manager Mirova and Omnes, a private equity and infrastructure investor, have invested in global clean energy enterprise TagEnergy. These investments will help drive the initial delivery of TagEnergy’s portfolio of more than 2.7GW across the UK, Spain, Portugal, France and Australia. TagEnergy was founded in 2019. “Both investors bring longstanding experience in partnerships with industrial players and both are aligned with TagEnergy’s long-term vision, and share strong financial capabilities and best-in-class ESG approach,” said TagEnergy CEO Frank Woitiez. “This significant investment will underpin our rapid growth as we scale our operations to speed the transition to more sustainable, competitive and clean power sources.” 

Bank of America and Access – the Foundation for Social Investment have become major backers of the upcoming Growth Impact Fund. The potential £25 million social investment fund is being developed by investment firm Big Issue Invest and charities UnLtd and Shift. “Through the Growth Impact Fund, we hope to catalyse and unlock finance for social entrepreneurs where it is most desperately needed,” said Bernard Mensah, President of International at the Bank of America. The Growth Impact Fund aims to tackle inequality and promote racial justice, catering to the needs of entrepreneurs from underrepresented background. “We believe, alongside our partners, UnLtd and Shift, that much more has to be done to make investment inclusive. We are on a journey to do just that and we could not do this without the support of Bank of America and Access,” said Jonny Page, Investment Director at Big Issue Invest.  

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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