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ESG integration

At HSBC Asset Management, we believe ESG issues can have a material effect on company fundamentals and performance over the longer term. By evaluating how companies manage their impact on the environment, their relationships with stakeholders and their operations, we are able to identify potential risks and opportunities which financial markets may not price appropriately.

To do this effectively, we’ve implemented a multi-faceted framework that systematically incorporates ESG issues throughout the investment process. This provides us with a holistic view of all the companies we invest in on behalf of our clients and ensures informed and sustainable investment decisions can be made.

Our framework

RI normative screening
We do not knowingly invest in companies associated with banned weapons including anti-personnel mines, cluster munitions, biological weapons, chemical weapons, non-detectable fragments and blinding laser weapons. These exclusions apply to all strategies despite being active, systematic or passive.

Proprietary ESG analysis
We start by identifying the most financially impactful E, S and G issues for each sector. Our proprietary scores are informed by our qualitative research and third party data.

Deep fundamental research
Portfolio managers and analysts conduct a thorough assessment of the ESG risks and opportunities associated with their investments.

ESG reports and tools
Investment teams are supported by tools developed by our dedicated ESG research team.

Active Ownership
Active ownership
Portfolio managers, analysts and the stewardship team exercise close oversight of active holdings, including regular meetings with company management. Passive strategies benefit from a thematic engagement overlay performed by our stewardship team.

Enhanced Due Diligence
Enhanced due diligence
Higher risk issuers trigger our Enhanced Due Diligence (EDD) process. This could result in continued engagement with the issuer, restrictions on new purchases, or the divestment of an existing holding. It is an integral part of our investment process for both equities and fixed income.