The Sustainable Finance Disclosure Regulation (SFDR – Regulation 2019/2088) provides for disclosures to be published on their internet websites by financial advisers.
MSS does not intend to provide investment advice as a matter of principle, but by derogation, this might happen from time to time. The below information is aimed at complying with the regulation, although it is not completely clear whether the requirement applies to the advices on financial instruments that do not qualify as “financial products” under SFDR. MSS does not provide any investment advice on SFDR products.
Article 3 Transparency of sustainability risk policies
HSBC Group recognises that environmental, social and corporate governance (ESG) factors, which includes climate change, can have a significant impact on individuals, businesses and communities across the world. HSBC Group is committed to accelerating the transition to a low-carbon global economy via financial services. In 2020, the next phase of the Group’s climate ambition was published. This includes the commitment to become a net-zero bank; supporting customers to thrive through the transition; and to unlock the next-generation of climate solutions. Central to this ambition is to reduce financed emissions to net zero by 2050 or sooner, in line with the Paris Climate Agreement. In doing so, HSBC Group aims to facilitate between USD750 billion and USD1 trillion of finance and investment by 2030 to support our clients.
As a leading international bank, HSBC Markets and Securities Services has a critical role to play. We are proud to support our clients’ aspirations to make a positive change in the world.
The products we offer are aimed at meeting hedging or investment needs; they are generally executed on a principal basis. Conventional derivatives executed with HSBC Continental Europe (Interest rate swaps, FX swaps and options, …) do not entail specific ESG risk and factors. Similarly, the execution of orders on bonds (be they issued by a Sovereign, a Supranational, an Agency, a Financial Group or a Corporate), on stocks or on structured notes or certificates do not imply an ESG specific analysis.
When this is relevant to meet the objectives of the client, MSS will include ESG risks in its advice. We will notably consider aligning on existing or potential Paris aligned or Climate transition benchmarks per the Climate Benchmark Regulation (2019/2089), taking into consideration analysis, scores and recommendations provided by HSBC Climate and ESG Research and/or consistency with existing KPIs or specific thresholds determined in the context of the issuance of a green bond, a sustainability linked RCF etc.
Article 4 Transparency of adverse sustainability impacts at entity level – Adverse sustainability impacts statement
MSS provides hedging and investments solutions to EU corporates, public sector entities and financial groups and to this end mainly executes transactions on a principal basis. According to its strategic orientations, HSBC Continental Europe aims at offering flow solutions and does not intend to provide investment advice and will not offer investment advice on SFDR products.
Should MSS provide an investment advice, the objectives specified with the client would identify whether MSS would be explicitly requested to consider in its advice the principal adverse impacts on sustainability factors, in accordance with the client’s priorities (risks and factors, selection criteria, potential rankings, ratings…).
MSS will monitor the recommendations, Q &A and guidelines that ESMA, the AMF and/or IOSCO will make in this field in order to keep pace with market place best practices.