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HSBC Global Asset Management

PRI reporting framework 2017

You are in Strategy and Governance » Governance and human resources

Governance and human resources

SG 07. RI roles and responsibilities


Roles present in your organisation

          Global Head of ESG Research
          Global Head of Corporate Governance

Other description (1)

Other description (2)

          24 local ESG Champions

07.2. For the roles for which you have RI oversight/accountability or implementation responsibilities, indicate how you execute these responsibilities.

07.3. Indicate the number of dedicated responsible investment staff your organisation has.

12 Number

07.4. Additional information. [Optional]

The accountable executive for our responsible investment business strategy is the Global Head of Product for Equities and Responsible Investment.  This also includes coordinating all client-related RI activities, leading ESG-focused product development across all asset classes and leading our policy advocacy activities with HSBC Group’s government affairs team.

Our Global Head of Product for Equity and RI is also a key member of HSBC Group's Climate Business Council (CBC), which is sponsored by Stuart Gulliver, our Global CEO. 

Our Climate Business Council (CBC), established in 2010, is an internal strategic committee whose role is to coordinate across the firm, identifying and developing products and services to meet clients’ sustainable finance needs. The CBC support clients who are transitioning to a low-carbon economy. It also pursues opportunities for collaboration across customer groups and products to support integrated climate related initiatives, such as smart cities, and sharing best practices with clients on opportunities to increase energy efficiency and reduce carbon emissions. In December 2016, we established a new dedicated team, the Sustainable Finance Unit (SFU). Reporting to the CBC, to support coverage, advise on developing content, and work with development teams to help mobilise sources of sustainable finance. In addition, other internal groups look at Risk, Public Policy and External. The SFU acts as a central point of coordination, working hand in hand with HSBC’s product and sector teams. Under the guidance of the CBC, it is working with the global businesses to help establish targets for sectors, countries and products, as well as KPIs for developing and tracking performance.

On the investment side, ESG integration is a shared task so all our 60+ Equity and Credit Analysts allocate around 15% of their time to perform related tasks, while portfolio managers include ESG considerations within their investment decision-making processes. Overall, we estimate that the time spent by our investment staff on ESG considerations corresponds to c. 9  full time equivalents.

These analysts and portfolio managers include 24 ESG Champions, who are all, by definition, members of our front office investment teams. ESG champions are local agents for change and act as the ESG reference point for their respective teams. They are subsequently in charge of training their colleagues on the use of the supporting ESG research and tools. On an ongoing basis they may also be asked to assist in providing ESG-specific content and answers to related RFI or RFP questions for Product, Prospect or Client-specific proposals as requested.

In early 2016 we have reinforced our RI staff by hiring two dedicated ESG engagement specialists: one in Paris, one in London. This is one step  on our journey to further strengthening the team we will have a focus on improving transparency on this activity.

At a global level, the entire process operates under the oversight of our Global Heads of ESG Research and Corporate Governance and, ultimately, of our Global CIO. Finally we established our Global ESG Oversight Forum in 2015, which is described in detail in our response to item SG 05.2.

SG 08. RI in performance management, reward and/or personal development

08.1. Indicate if your organisation’s performance management, reward and/or personal development processes have a responsible investment element.

Chief Executive Officer (CEO), Chief Investment Officer (CIO),  Investment Committee

Other C-level staff or head of department

          Global Head of ESG Research

Portfolio managers

Investment analysts

Dedicated responsible investment staff

Other role (1) [from SG 07]
          Global Head of Corporate Governance
Other role (2) [from SG 07]
          24 local ESG Champions

08.3. Provide any additional information on your organisation’s performance management, reward and/or personal development processes in relation to responsible investment.

HSBC Global Asset Management always puts its clients first. Investment professionals are incentivised to generate investment performance in a way that is consistent with the needs of the client. No investment professional is paid mechanistically according to the performance of any given fund, the performance fees generated by a fund, or the profitability of any given capability. In other words, individuals do not benefit from one fund doing better than any other which they manage. Instead, variable compensation for investment professionals is discretionary, as for other employees in the business. The size of the bonus pool is linked to the profitability of the business.

Given the emphasis in HSBC Global Asset Management on discipline in the execution of investment strategies, ESG included, and the team approach to portfolio management, the pay-out of any bonus to an investment professional is primarily dependent on expected behaviours and investment governance standards being met.

We have made ESG integration compulsory across all our global and local Equity and Fixed Income strategies, which means all our portfolio managers and analysts must pay great attention to Environmental, Social and Governance inputs consistently.

In addition, a combination of personal and investment performance parameters determine the individual's and overall investment team's contribution to performance. We believe that it is vital to maintain the link of variable pay to the achievement of the business objectives of the company, while ensuring total compensation packages remain competitive. Regardless of market environment, we believe it is important to recognise and reward good judgement, performance and contributions made.