Key Impact Points:
- Sustainable Investment Enhancement: The new fund by IFC and HSBC AM targets corporate bond issuers in emerging markets to boost sustainable finance and growth aligned with the UN’s Sustainable Development Goals (SDGs).
- Strategic Funding Initiatives: Set to mobilize additional institutional investors with a $100 million anchor investment from IFC, emphasizing support for sustainable technologies and social impacts.
- High Compliance and Transparency: The fund adheres to the highest sustainability criteria under SFDR Article 9, ensuring issuer-level sustainability and transparency in emerging market investments.
IFC, a member of the World Bank Group, in collaboration with HSBC Asset Management (HSBC AM), announced the creation of a specialized fund vehicle aimed at enhancing sustainability in the emerging market (EM) corporate bond sector. This initiative will support issuers that make significant contributions to sustainable technologies and social impact projects.
Sustainable Investment Strategy
The fund will bolster the HSBC Global Emerging Market Corporate Sustainable Bond Strategy by investing in publicly listed bonds issued by corporate and financial institutions in EMs. It is classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR), which represents the highest level of sustainability commitment.
Commitment to Sustainability
Mohamed Gouled, Vice President of Industries at IFC, highlighted the strategic focus of the initiative: “By aligning with SFDR Article 9, the HSBC corporate bond strategy will support the growth of sustainable businesses and accelerate their green transition. IFC’s investment is expected to mobilize additional institutional investors and increase the pool of capital dedicated to sustainability-related transactions in emerging markets.”
Expansion of Partnership and Market Impact
Nicolas Moreau, CEO of HSBC Asset Management, reflected on the expanded partnership: “We are pleased to expand our partnership with IFC, which dates back to 2019 following the launch of HSBC Real Economy Green Investment Opportunity GEM Bond Fund (REGIO), as we reinforce our contribution to improved sustainability in emerging markets and help support our clients’ sustainable investment objectives.”
Conclusion
This collaboration is a strategic step towards filling the financing gap for EM corporate issuers, aligning with the SDGs, and potentially transforming the financial landscape for sustainability in emerging markets. The initiative is poised to catalyze significant ESG and sustainability advancements, crucial for achieving the SDGs and meeting the Paris Agreement commitments in these regions.
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