HSBC Asset Management (HSBC AM) announced today the launch of a new ESG money market fund, the HSBC US Dollar ESG Liquidity Fund, aimed at providing a sustainability-aligned cash investment option for institutional investors, including large corporates, pension funds and insurers.
The announcement marks the second ESG-focused money market fund by HSBC, following last year’s launch of the HSBC Sterling ESG Fund, which the firm revealed has already surpassed £1 billion.
Jonathan Curry, Global Liquidity CIO, HSBC AM said:
“We are committed to delivering market-leading solutions to meet the responsible investment ambitions of our clients. Our Sterling ESG money market fund has resonated strongly with investors seeking to align their cash investment activity with their organisations overall sustainability objectives.”
The new fund will invest in a portfolio of issuers that have an A1, P1 or F1 rating, or long-term equivalent, and that HSBC AM has identified as being demonstrably stronger at addressing ESG risks relative to other issuers in the investable universe. To achieve this, the fund will apply an ESG scoring system and relative ESG filters that are appropriate for the money market investable universe.
HSBC said that issuer engagement will be a key component of the fund’s approach, with the firm encouraging issuers to address identified shortcomings in how they manage ESG risks. The climate change orientated engagement program will focus on the emissions trajectory of bank issuers and advocate for their participation in the Net Zero Banking Alliance and for improved quality and availability of scope 3 carbon data.
HSBC stated that it aims to increase the focus on better management of ESG risks and achieve more sustainable outcomes.
“Expanding the currencies in which we offer within our ESG MMF strategy to include the US Dollar fund, will allow us to reach a more globally diverse group of investors, enabling them to invest in issuers that better manage ESG risks and with this investment influence, we anticipate issuers of short term debt will improve their ESG practices.”