HSBC Life adheres to the HSBC Insurance Sustainability Policy (the “Sustainability Policy”) set out at the level of HSBC Group Insurance (the “Group”). The Sustainability Policy is geared towards ensuring that sustainability risks are integrated into the investment decision-making process of all entities within the Group. On this basis, HSBC Life is able to assess the actual or potential material negative impact/s which the occurrence of adverse environmental, social or governance events could have on the value of its investments.
In so far as direct investments are being made by HSBC Life and/or HSBC Global Asset Management (Malta) Ltd (“HSBC Asset Management”) for and on behalf of HSBC Life pursuant to an investment management agreement entered into to this effect (thereby excluding mutual funds, or passive strategies replicating an index, etc.), HSBC Life adopts and implements negative screening practices which are intended to restrict or prohibit investments in selected securities where these do not meet the sustainability standards established in the Sustainability Policy. These restrictions are applied to the extent that specific data thresholds used for the purpose of identifying and assessing the severity (or otherwise) of any given investee company’s effect on sustainability factors are met. The Group consolidates these restrictions in the form of a prohibited investment list which is updated from time to time to align with its commitments and policies. HSBC Life is prohibited from making any new investments in securities of companies or assets which are on this list. As for legacy investments falling outside the prohibited investment list (as updated from time to time), an exit plan is formulated. These restrictions / prohibitions in turn align with the Group’s stand-alone Sustainability Risk Policies (available at the Sustainability risk page) which relate to:
(i) Agricultural Commodities,
(ii) Chemicals Industry,
(iii) Energy,
(iv) Forestry,
(v) Mining and Metals,
(vi) Thermal Coal Phase Out,
(vii) World Heritage Sites and Ramsar Wetlands, and
(viii) Defence Equipment Policies.
In addition, HSBC Asset Management itself abides by a Responsible Investment Policy which outlines its approach to responsible investing; focusing on the ten principles of the UN Global Compact (“UNGC”). The UNGC sets out key areas of non-financial risk which are to be considered as part of the investment process – i.e., human rights, labour, environment and anti-corruption.
As for those instances where HSBC Life is directly investing in collective investment schemes (which are in turn administered by asset managers exercising exclusive discretion to invest in other underlying securities and/or funds), HSBC Life seeks to primarily, but not necessarily exclusively, engage and work with those asset managers who are signatories to the Principles for Responsible Investment (“PRI”) and/or others who have sustainability integration and investment stewardship practices in place. These asset managers need to be able to demonstrate, to HSBC Life’s satisfaction, the adoption and implementation of sustainability principles and standards in the course of their respective investment decision-making processes.