HSBC Global Asset Management (HSBC GAM) is to launch a new green bond fund, the HSBC Real Economy Green Investment Opportunity GEM Bond Fund (REGIO).
The fund’s aim will be to enable investors to achieve real economy impact to deliver against the Paris Climate Agreement and Sustainable Development Goals.
IFC, an anchor investor, and HSBC intend to commit up to USD100 million and up to USD75 million respectively to the fund. IFC is a member of the World Bank Group and a leader in catalysing private sector participation in sustainable financing. Since 2010, IFC has issued 143 green bonds in 16 currencies, totalling USD9 billion.
HSBC Global Asset Management has also issued a ‘Green Impact Framework’ which will support the fund. The aim of the framework is to show potential bond issuers the eligibility criteria it will be considering when selecting green bonds for REGIO. It is expected that this framework will also encourage transparency and knowledge sharing amongst investor and issuer communities.
REGIO will target real economy issuers in global emerging markets (GEM) in order to increase access to climate finance and promote the development of sustainable capital markets by broadening the range of issuers. The fund will provide geographically4 and sectorally diversified investment opportunities. REGIO will look to harness at least USD500 million to USD700 million in capital, largely through bonds issued by non-financial or real sector companies5 in EM countries, to promote the United Nations’ (UN) Sustainable Development Goals.
“HSBC Global Asset Management has deep expertise and experience in investing in global emerging markets and a strong commitment to playing its part in mobilising capital to deliver on the UN Sustainable Development Goals and transitioning to a low-carbon global economy,” says Sridhar Chandrasekharan, Global CEO, HSBC Global Asset Management.
“This innovative fund will provide new opportunities for an important class of borrowers in green bond markets,” says Philippe Le Houérou, CEO at IFC. “The capital raised by REGIO will make a vital contribution to the fight against climate change and further promote sustainability-oriented capital markets.”
HSBC Global Asset Management was an early signatory to the Principles for Responsible Investment (PRI) in 2006 and the UK Stewardship Code in 2010. In 2017, it supported the Task Force on Climate-related Financial Disclosures recommendations, and is a member of the Blended Finance Taskforce.
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