The HSBC World ESG Biodiversity Screened Equity UCITS ETF invests in companies with strong biodiversity credentials, aimed at wholesale and institutional investors.
It will track the Euronext ESG Biodiversity Screened index series, which is a group of investable biodiversity screened benchmark indices based on a broad range of equities utilising Euronext World as the parent index.
The fund will apply three exclusionary filters: a socially responsible investment filter, a negative ESG screen to remove the worst 25% constituents and an IDL Corporate Biodiversity Footprint ‘uplift’ of approximately 35% versus the parent index.
IDL’s Corporate Biodiversity Footprint assesses four of the most material impacts on biodiversity: climate change, land use, air pollution and water pollution.
After filters are applied, the ETF will consist of the top 500 companies that perform best in terms of corporate biodiversity footprint and ESG risk score, while not participating in any of the exclusionary activities applied by the SRI filter.
According to the firm, despite a lack of full and comprehensive biodiversity data there is currently a need for multiple screens which capture the risks.
Olga de Tapia, global head of ETF and indexing sales at HSBC AM, said: “This ETF is the newest in our suite of sustainable building blocks we have been innovating for investors, to help them 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 this ETF is hopefully a step in combatting the biodiversity crisis.”
The fund will run a total expense ratio of 0.35% and is registered on the London Stock Exchange under ticker HBDV LN.