HSBC, London, is changing the benchmark of its £1.85 billion ($2.25 billion) passive global equities investment option managed by Legal & General Investment Management in the bank’s £2.6 billion defined contribution plan to seed the money manager’s new Future World Fund, an HSBC spokeswoman said.
The HSBC DC Global Equities Passive Fund currently is managed by LGIM against the FTSE All-World market capitalization index. That will change to the new FTSE All World (ex-CW) Climate Balanced Factor Index and will seed LGIM’s new Future World Fund.
LGIM announced in a news release on Monday the launch of the Future World Fund and HSBC as its first investor.
The Future World Fund “incorporates a ‘climate tilt’ to reduce exposure to companies with worse-than-average carbon emissions and fossil-fuel assets, and increases exposure to companies that generate revenue from low-carbon opportunities,” the LGIM news release said.
Mark Thompson, HSBC Bank UK Pension Scheme’s chief investment officer, said in the release, “We believe this fund will offer our members a better risk-adjusted return, incorporate greater climate change protection and deliver improved company engagement. This is a mainstream fund, the new normal.”