HSBC sells ESG-themed structured note

HSBC has rolled out a new ESG product for its private banking clients in Asia.

The note is linked to the performance of a basket of equities listed in New York, Hong Kong and Europe – all with an ESG stock theme, an HSBC spokesperson told FSA. The securities rate in the top 50% by ESG score, using the Sustainalytics ESG risk ratings methodology, in their respective industries.

The product has a maturity date of one year, and is available in US dollars, renminbi and Hong Kong dollars.

Investors can opt for underlying securities of various thematic sectors such as technology, payments, consumption and semiconductors, with investment periods ranging from one- to five-years. The idea is that HSBC ‘s wealth clients can add ESG factors to their preferred investments without changing their financial objectives.

“Investors are placing greater importance on ESG factors in their investment decisions, and they increasingly view companies’ sustainability credentials as a key indicator of their long-term value,” said Antony Shaw, global head of emerging markets and wealth sales, HSBC markets and securities services, in a statement.

Proceeds of the ESG-themed structured note will go towards financing eligible businesses and projects that promote the transition to a low-carbon, climate-resilient and sustainable economy and provide clear environmental sustainability benefits as defined by the HSBC Green Bond Framework, according to HSBC.

The product is available to HSBC’s high net worth (minimum of $1m of investable assets) and ultra-high net worth (minimum of $30m of investable assets) clients in Hong Kong and Singapore.

“There is growing evidence that incorporating strong ESG considerations can improve portfolio resilience by mitigating risk, and we are seeing higher demand from clients for new and innovative ways to invest sustainably,” said Siew Meng Tan, regional head of global private banking, Asia Pacific, HSBC

HSBC has said it will provide up to $1trn of finance and investment by 2030 to support its customers in the net zero transition. Other ESG product initiatives include the launch in February 2021of a renminbi-denominated retail green certificates of deposit in Hong Kong, and the HSBC GIF Global Equity Sustainable Healthcare Fund in Singapore.