HSBC Asset Management announced the launch of the HSBC World ESG Biodiversity Screened Equity UCITS ETF, a new fund aimed at enabling investors to build biodiversity considerations into their portfolios and mitigate related investment risks by investing in companies with stronger biodiversity credentials.
According to HSBC AM, the product is the first biodiversity screened ETF.
The new ETF tracks the Euronext ESG Biodiversity Screened World Index, developed jointly between HSBC and environmental data and analytics solutions provider Iceberg Data Lab. The index builds upon Iceberg Data Lab’s Corporate Biodiversity Footprint (CBF) tool, which identifies the impact of companies on key environmental pressures, including land use, climate change, air pollution and water pollution.
The index is comprised of 500 companies screened on the basis of their CBF score, in addition to socially responsible investment (SRI) filters for exposure to areas including weapons, tobacco, thermal coal and animal testing, among others. Companies ranking in the bottom 25% on an ESG risk score are also excluded.
On its website introducing the new ETF, HSBC AM said:
“Natural ecosystems are under threat as a result of deforestation, land degradation, pollution of the water, air and soil, hunting and harvesting and climate change. Companies will face ongoing challenges relating to reporting and disclosure which mean heightened risk of litigation besides the obvious physical and transition risks.”