HSBC MSCI World Climate Paris Aligned UCITS ETF

Issuer: HSBC

Asset Class: Equity

TER: 18bps

Trading Currency: USD

Pays Income: False

Listing Date: 08 Jul 2021

Ticker: HPAW

ISIN: IE00BP2C1V62

This fund offers exposure to a global portfolio of companies from developed markets that are specifically selected to align with the objectives of the Paris Agreement. The core strategy is to invest in businesses that are actively transitioning towards a low-carbon economy, making it suitable for investors looking to integrate climate-conscious principles into their core equity holdings. The investment approach involves significantly reducing the portfolio's greenhouse gas emissions intensity compared to a standard global market benchmark. By focusing on companies leading the charge in decarbonization, the fund aims to mitigate long-term climate-related risks while capturing opportunities arising from the global shift towards sustainability.

The underlying index employs a rules-based methodology to construct a portfolio that is consistent with a 1.5°C global warming scenario. It systematically re-weights constituents based on their climate credentials, favouring companies with robust carbon reduction targets and those providing green solutions. The methodology also implements strict exclusions for companies involved in controversial activities or those with high carbon emissions and fossil fuel reserves that are misaligned with climate goals. This results in a portfolio tilted towards sectors and firms poised to thrive in a carbon-constrained world, such as those in renewable energy, energy efficiency, and sustainable technology.

For investors, this product provides a tool to achieve diversified global equity exposure while proactively addressing the financial risks posed by climate change. It can function as a core building block for a portfolio, offering the potential for long-term capital growth by investing in companies that are better prepared for the future regulatory and economic landscape. This approach allows investors to not only seek competitive financial returns but also to contribute capital towards companies that are actively working to solve one of the world's most pressing challenges, thereby aligning their financial goals with positive environmental impact.