HSBC Asset Management has launched its inaugural Paris-Aligned ETF, the HSBC MSCI World Climate Paris Aligned UCITS ETF, which will track the MSCI World Climate Paris Aligned Index.
The firm writes that this ETF will give investors access to a universe of companies aligned with global efforts to reduce emissions and mitigate the impacts of climate change. The Paris Agreement aims to reduce greenhouse emissions, with a goal of limiting global warming to 1.5º Celsius, compared to pre-industrial levels. Governments and companies globally are implementing policy frameworks to align economic activity with the Paris Agreement, with significant capital investment being allocated to the transition to a green economy.
The MSCI World Climate Paris-Aligned Index includes large and mid-cap companies across 23 developed market countries1. It aims to reduce investment exposure to transition and physical climate risks by applying a range of climate metrics such as Climate Value-at-Risk in portfolio construction, while maximising opportunities arising from the transition to a lower-carbon economy and alignment with the Paris Agreement requirements. The MSCI Climate Paris-Aligned Indices are designed to go beyond EU minimum standards to address climate change risks and opportunities and follow a rules-based and transparent methodology designed to align with a 1.5ºC climate scenario.