Sustainability Leaders Fund Established

HSBC Investments
July 6, 2006

HSBC Investments has launched the 'HSBC GIF Sustainability Leaders Fund', an innovative investment fund focusing on European multinational companies that HSBC considers to be leaders in sustainable development. The fund has been developed with LEAD (Leadership for Environment and Development), an international not-for-profit organisation focused on leadership and sustainable development.

Stephen Green, Group Chairman, HSBC Holdings plc, said: "Sustainability matters because the societies we operate in tell us it matters. We believe it is complementary with profit, and for this reason sustainability is part of our growth strategy and our brand. If we are to succeed, we need to incorporate sustainable development into how we provide financial services to our clients. The HSBC GIF Sustainability Leaders Fund marks another step on this journey."

The fund is made up of a portfolio of around 40 companies of varying size, mainly larger companies, each selected by using a 'best-in-class' approach. Tobacco and arms-related companies are systematically excluded. Investment in smaller European companies will focus on those that are developing innovative new technologies and processes to support sustainable development.

The objective of the fund is to provide consistently strong returns in the long term, offering a unique opportunity to invest in companies with exemplary environmental and social practices within a mainstream equity framework.

Investors in the fund also directly support the work of LEAD, which receives a donation from a portion of the management fees charged by HSBC. LEAD will use the funds raised to support training programmes to develop leaders worldwide who can mobilise others to make a real difference to sustainability.

"LEAD has partnered with HSBC to develop the Sustainability Leaders Fund because we have a shared commitment to sustainable development and strong leadership," said Dr Simon Lyster, Executive Director of LEAD International. "The fund will reward businesses that are serious about social and environmental issues. It will also provide LEAD with much needed resources to train more of tomorrow's leaders around the world to promote sustainable development".

The HSBC GIF Sustainability Leaders Fund is managed by HSBC's highly experienced Paris-based Socially Responsible Investment (SRI) team. The SRI analysts consider each company through detailed qualitative and quantitative research as well as through rigorous one-to-one company meetings. The fund manager then selects companies from the reduced SRI universe based strictly on financial criteria, by comparing their ability to create economic performance with their stock market valuation.

HSBC has also recently adopted the United Nations Principles for Responsible Investment, which provides a voluntary framework for investors to incorporate environmental, social and corporate governance issues into mainstream investment decision-making.