HSBC in Malaysia launched its first environmental, social and governance (ESG) Islamic structured product in the country.
The bank said the new offering reflects the group's aspiration in the sustainable investment field and is in keeping with Bank Negara Malaysia's value-based intermediation initiative.
HSBC Bank Malaysia country head, retail banking and wealth management, Tara Latini, said ESG factors can be used to drive portfolio performance and investors must now think carefully about these factors when making investment decisions.
Here in Malaysia as well as worldwide, we see more asset owners embracing the notion that long-term sustainability needs to be embedded in their investment processes"
"In fact, here in Malaysia as well as worldwide, we see more asset owners embracing the notion that long-term sustainability needs to be embedded in their investment processes," she said.
"The launch of the ESG Islamic Structured Product is indeed in line with HSBC Group's aspiration in sustainable investment and reflects the Group's overarching commitment to global sustainable development. We at HSBC believe that ESG factors can be used to drive portfolio outperformance and investors should consider these factors when making investment decisions," Latini added.
The new ESG product, which is 100% principal protected if held to maturity, pays a fixed coupon of 3.90% per annum (three years tenor) and 4.50% per annum (four years tenor) in the first two years of the investment.
Payout at the end of third and fourth year is subject to Hang Seng Corporate Sustainability Index performance and subject to a cap of 5.90 percent and US dollar-ringgit adjustment.
HSBC said ESG investing is the concept of incorporating Environmental, Social and Governance factors alongside traditional financial factors in investment process. ESG investing generally aims to generate long-term financial returns whilst contributing positively to society.
Some of the common topics examined under ESG investing process are climate change impact, energy efficiency, human rights, consumer privacy, gender equality, health and safety, corporate governance, business ethics and more.
According to the latest data by Global Sustainable Investment Alliance (GSIA) published in April 2019, global sustainable-investing assets grew 34% to $30.7trn in 2018 from $22.9trn in 2016.
The product is open for subscription by HSBC/ HSBC Amanah Premier customers until June 21, 2019.