HSBC Asset Management plans to launch a specialised fund vehicle that supports corporate bond issuers in emerging markets with sustainable finance.
The firm has agreed the launch in partnership with IFC, a member of the World Bank Group, which has proposed a $100 million seed investment in the strategy.
Investments will be in publicly listed bonds issued by corporate and financial institutions in emerging markets and the vehicle carries Article 9 status under the EU’s Sustainable Finance Disclosure Regulation (SFDR), which is the highest level of classification in terms of sustainability.
The fund will support the existing HSBC Global Emerging Market Corporate Sustainable Bond Strategy and will invest in emerging market corporate bonds and related securities that contribute to UN SDGs.
“By aligning with SFDR Article 9, which places a strong emphasis on issuer-level sustainability and transparency beyond just an issuance’s use-of-proceeds, the HSBC corporate bond strategy will support the growth of sustainable businesses and accelerate their green transition,” said Mohamed Gouled, Vice President of Industries, IFC. “IFC’s investment is expected to mobilise additional institutional investors and increase the pool of capital dedicated to sustainability-related transactions in emerging markets.”
HSBC AM said collaboration aims to further drive sustainable growth and impact in emerging markets by investing in key areas such as sustainable technologies and social impact. While emerging market countries comprise more than 80% of the world’s population, they capture a much smaller share of global financing and that significant investment is needed to advance and accelerate their transition to a sustainable future.
HSBC AM’s partnership with IFC dates back to 2019 following the launch of HSBC Real Economy Green Investment Opportunity GEM Bond Fund.
Nicolas Moreau, CEO of HSBC AM, said: “We hope this collaboration demonstrates the financial market opportunity in funding sustainability to help bridge the financing gap for EM corporate issuers whose activities are aligned with and positively contribute to the UN’s Sustainable Development Goals.”
