HSBC launches biodiversity ETF

Uses three filters to screen top 500 companies

HSBC Asset Management has launched a biodiversity ETF that uses three filters to identify companies with strong biodiversity credentials.

The HSBC World ESG Biodiversity Screened Equity UCITS ETF comprises 500 companies by applying three exclusionary biodiversity filters: the Socially Responsible Investment filter, negative ESG screening using Sustainalytics to remove the worst 25% of companies, and the Iceberg Data Lab (IDL) Corporate Biodiversity Footprint.

It tracks the Euronext ESG Biodiversity Screened Index series, which were jointly developed by HSBC, Euronext and IDL. These were the first investable biodiversity screened benchmark indices based on a broad range of equities. The parent index is the Euronext World Index.

Patrick Kondarjian, global head of ESG sales, markets and securities services at HSBC, said: “We’re pleased to have helped HSBC AM create the world’s first ETF that tracks the Euronext ESG Biodiversity Screened World USD Index. The index is part of the first range of investable biodiversity screened Equity benchmark indices, allowing investors to take into account the impact of companies on nature in addition to traditional ESG risk metrics.”

The fund, which has a total expense ratio of 0.35%, is available to both wholesale and institutional investors and meets Article 8 Sustainable Finance Disclosure Regulation classification.

Olga de Tapia, global head of ETF and indexing sales at HSBC Asset Management, added: “This ETF is the newest in our suite of sustainable building blocks we have been innovating for investors, to help them create portfolios that address material environmental issues such as biodiversity and climate change.

“We have a huge part to play in the protection and preservation of biodiversity which can be achieved through ‘biodiversity aware’ investment processes and this ETF is hopefully a step in combatting the biodiversity crisis.”