HSBC AM Launches ESG Money Market Fund
Posted by Colin Lambert. Last updated: October 18, 2021
Reinforcing the attention being paid to ESG investing, HSBC Asset Management (HSBC AM) has launched a new ESG money market fund, the HSBC Sterling ESG Liquidity Fund, which has received seed investment from British multinational retailer Tesco.
The fund will invest in a portfolio of issuers that have an A1, P1 or F1 rating, or long term equivalent, and are demonstrably better at addressing ESG risks than other issuers in the investable universe. It says this will be achieved by applying a robust ESG scoring system and relative ESG filters that are appropriate for the money market investable universe. The fund will enable institutional investors to focus their cash investments in a solution that helps them meet their own sustainability objectives, it adds.
Issuer engagement will also be a key component of the fund’s approach. To meet sustainability goals, HSBC AM will be encouraging issuers to address identified shortcomings in how they manage ESG risks. This ensures that companies are aware that their ESG performance is factored into decisions on whether their short-term debt issuance is eligible to be purchased by the fund. By doing so, HSBC AM says it aims to increase the focus on better management of ESG risks and achieve more sustainable outcomes.
In addition to the investment process focused on addressing ESG risks and opportunities, the fund says it will look to evolve to include other features to provide further contribution to investors’ sustainability objectives.
“For corporate treasurers, the use of a money market fund that credibly applies ESG to its investment process can contribute to the company’s overall sustainability objectives,” says Jonathan Curry, global liquidity and Americas CIO, HSBC AM. “For individual or institutional investors with a specific focus on sustainable investing, cash no longer needs to be an afterthought in a sustainably invested portfolio.”