sustainable investment

now it's easier to do the right thing

Overview

Default investment strategies are designed to meet the needs of the majority of scheme members. The question facing HSBC was how to include environmentally-focused investments into the default that the Trustees and members wanted, without damaging investment potential.

The Team

Rob Price
Philip Rose
Honor Fell

CSR

We don’t just do the right thing for our clients, it’s something we believe in as a company

INVESTMENT STRATEGIES

that reflect member beliefs

Even though the majority of members invest in the default, this doesn’t mean that it can’t align to their values and beliefs. However, no such fund existed for a DC scheme and this was a challenge HSBC was willing to take on with our support and advice.

After conducting a survey, they found that younger scheme members wanted to see more investment in companies that are sensitive to climate change included in the default investment strategy. Such a feature would be great for engagement, but it was a challenge to create a fund that would meet the needs of the members, and sit within the charge cap. Our challenge was to develop a solution that took these factors into consideration.

When there's no solution

we create one

We began by working with HSBC, generating ideas and selecting a fund manager. After carrying out some detailed research and discussing the challenge, we chose L&G, briefing them to design an investment fund that matched the environmental criteria members needed. We also needed a risk/return profile that, when it was included in the default strategy, was aligned to its overall objective.

Our Risk Assessment team and CIO delved into the figures, using our proprietary modelling and analysis to clarify the potential of the fund to produce good risk-adjusted returns in the future.

We completed the project with guidance on communications, to make members aware of the changes to the default strategy.

A new fund that fits the bill

Our dedicated team, along with L&G, successfully built and launched the LGIM Future World Fund. It’s a passive factor-based global equity fund, designed for DC schemes looking for an alternative to a traditional index strategy, while also addressing the long-term financial risks of climate change.

 

The fund allows HSBC members to reflect their views on climate change without sacrificing their future retirement income.

Redington was an integral part of the team involved in the launch of this fund, and supported the Trustee along the journey, from default design to implementation.
Mark Thompson, CIO of HSBC Bank Pension Scheme

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Give us a call

we'll find the right answers

It all starts with a conversation. Call, email, or pop in, we’ll talk you through how we can help. Not sure we offer what you’re looking for? Get in touch anyway – we’d love to hear from you.