HSBC Asset Management has launched a global equity ESG ETF investing in companies with strong biodiversity credentials.
The HSBC World ESG Biodiversity Screened Equity UCITS ETF (HBDV) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.35%.
HBDV is the first ETF to track the Euronext ESG Biodiversity Screened World USD index, a subset of the Euronext World index, which was jointly developed by HSBC AM, Euronext and Iceberg Data Lab.
According to HSBC AM, it is the first biodiversity screened index and applies three exclusionary biodiversity filters including a socially responsible investment filter to include considerations such as pesticides, hunting and whaling.
It will also remove the worst 25% ESG constituents using the Sustainalytics risk performers methodology and will aim to boost the biodiversity footprint of around 35% compared to the parent index.
Following the filters, the ETF will consist of the top 500 companies that perform the best in terms of the Corporate Biodiversity Footprint and Sustainalytics ESG risk score.
The ETF is labelled Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).
Olga de Tapia (pictured), global head of ETF and indexing sales at HSBC AM, said: “HBDV is the newest in our suite of sustainable building blocks to help investors 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 HBDV is hopefully a step in combatting the biodiversity crisis.”
Patrick Kondarjian, global head of ESG sales, markets and securities services at HSBC, added: “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.”
It is the first product launched by the asset manager since its former global head of responsible investments, Stuart Kirk, resigned following his controversial comments at an FT Morel Money event.
In April, the UK giant launched the HSBC Europe ex UK Sustainable Equity UCITS ETF (HSXU) tracks the FTSE Developed Europe ex UK ESG Low Carbon Select index.
In February 2021, smart beta specialist Ossiam launched the world’s first actively-managed biodiversity food ETF. The Ossiam Food For Biodiversity UCITS ETF, was also created in partnership with Iceberg Data Lab.