Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Taiwan pension fund awards $2.3 billion ESG mandate to HSBC, Morgan Stanley, 3 others

Published 06/24/2022, 03:09 AM
Updated 06/24/2022, 03:16 AM
© Reuters. FILE PHOTO: People walk in front of the headquarters for HSBC Bank in Jakarta April 11, 2008. REUTERS/Beawiharta (INDONESIA)//File Photo

© Reuters. FILE PHOTO: People walk in front of the headquarters for HSBC Bank in Jakarta April 11, 2008. REUTERS/Beawiharta (INDONESIA)//File Photo

By Selena Li

HONG KONG (Reuters) - The fund management arms of HSBC and Morgan Stanley (NYSE:MS) were among three others to win a mandate from Taiwan's largest pension manager to run Asia's first climate change-focused fund worth a total $2.3 billion in assets.

Legal & General Investment Management, Schroder Investment Management, and Wellington Management were also selected, with each of them getting to manage $460 million worth of assets, Taiwan's Bureau of Labor Funds (BLF) said on Friday.

About half of BLF's Taiwanese $5.8 trillion ($190 billion) worth of assets is invested in offshore markets and overseen by global asset managers including BlackRock Inc (NYSE:BLK), Fidelity Investments, and PIMCO.

The selection of HSBC for the climate change-focused fund comes weeks after a senior banker at the lender downplayed the climate risks which drew queries from staff and customers about its commitment to fight climate change.

Stuart Kirk, who is global head of responsible investing at HSBC Asset Management, told a conference last month "climate change is not a financial risk we need to worry about", comments that prompted HSBC to suspend him and conduct an internal probe.

BLF last month shortlisted about 10 asset managers including HSBC from more than 40 global applicants for the mandate, Liu Liju, deputy director general at the fund, told Reuters in an interview.

The Taiwanese pension fund, however, engaged an independent consultant to assess whether the Asia-focussed bank was still qualified for a possible role after Kirk's controversial comments.

The consultant's review concluded that Kirk's remarks were "a reflection of the executive's personal emotion", and that HSBC had ticked the boxes in track records for managing funds, investment procedure and investment philosophy, Liu said.

"I believe HSBC will handle this incident discreetly, otherwise the market will give it a very cruel judgement," Liu said, referring to Kirk’s comments.

The BLF mandate is a key milestone regionally and managers should expect quarterly and annual reviews done by the fund and its consultants to monitor whether managers stay on track in committing to fight climate risks, Liu said.

© Reuters. FILE PHOTO: People walk in front of the headquarters for HSBC Bank in Jakarta April 11, 2008. REUTERS/Beawiharta (INDONESIA)//File Photo

Benchmarked against MSCI ACWI Climate Paris Aligned Index, its mandatory for global asset managers to pick fund portfolio companies that are index constituents.

HSBC Asset Management didn't immediately respond to a Reuters request for comment.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.