Here we explore why sustainable investing is important, the different types of sustainable investing and how you can invest sustainably with HSBC.
The global population is expected to reach 9 billion by 2037. As people live longer, more of us will be affected by the way our nations are run, the state of our environment and the wellbeing of the people in it.
Your investment can help sustainable companies develop, innovate and grow.
When you invest sustainably, more of your money is going towards companies that are making a difference.
Sustainable investing also recognises that companies that aim to solve the world's biggest challenges could be those best positioned to grow.
As an investor, you're likely to want to know where your money is going and what it's being used for. When you invest sustainably, more of your money is going towards companies that are making a difference.
Sustainable investing also recognises that companies who aim to solve the world's biggest challenges could be those best positioned to grow.
Environmental and social issues can impact share prices. Factoring these into your investments could help:
But bear in mind, there's no guarantee that sustainable investments will produce returns similar to those which don’t consider these factors.
Remember – the value of any type of investment can fall as well as rise and you may not get back what you invest.
And all investments should be seen as a medium to long-term commitment, meaning you should be prepared to invest for at least 5 years.
Sustainable investing can use different methodologies and may be referred to as:
While they broadly mean the same, there are some key differences in the way they work. These are important to understand before you choose how to invest.
Ethical investing actively avoids companies or industries that have a negative impact on society and the environment. This is called negative screening. Sectors such as tobacco, animal testing, gambling and oil and gas are typically excluded from this type of investing.
ESG investing actively selects companies that have a positive impact on the world. It's less restrictive than ethical investing as it considers companies that are adapting, such as oil companies that invest in clean energy.
Impact investing actively selects companies whose positive impact on the world can be measured. For example, those who generate a specific amount of recycling or save a certain amount of water.
We use this framework to make sure the companies we work with are doing more to tackle environmental, social and governance (ESG) issues.
| ESG framework | Example | Factors include: |
|---|---|---|
| Environmental | What impact does the company have on the environment? |
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| Social | How is the company supporting its employees, clients and communities? |
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| Governance | How is the company governed or managed? |
|
| ESG framework | Environmental | Environmental |
|---|---|---|
| Example | What impact does the company have on the environment? | What impact does the company have on the environment? |
| Factors include: |
|
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| ESG framework | Social | Social |
| Example | How is the company supporting its employees, clients and communities? | How is the company supporting its employees, clients and communities? |
| Factors include: |
|
|
| ESG framework | Governance | Governance |
| Example | How is the company governed or managed? | How is the company governed or managed? |
| Factors include: |
|
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If you're considering sustainable investing, we can help you get started.
If you're looking for advice on sustainable investing speak to one of our Wealth Managers who can advise which funds might be suitable based on your investment needs. So you can be confident your money is behind companies trying to make a difference - at a level of risk you're comfortable with.
To invest with us, you need to have an HSBC current account or savings account. Eligibility criteria and charges apply.
1Source: Schroders: Global Investor Study 2020
2Source: United Nations (UN): Global population Dynamics
3Source: STERN: ESG and Financial Performance
Please remember that the value of investments, and any income received from them, can fall as well as rise, is not guaranteed and you may not get back the amount you invested. This could also happen as a result of changes in currency exchange rates, particularly where overseas securities are held or where investments are converted from one currency to another. We always recommend that any Investments held should be viewed as a medium to long-term investment, at least five years.
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