Aegon UK implement HSBC Global Asset Management’s Sustainable Index in their ESG drive.
Aegon UK has invested £1.68bn in HSBC Global AM’s low-carbon index. By incorporating ESG criteria to its in-house funds, Aegon UK aims to reach its goal of zero carbon emissions by 2050.
As of January 2021, Aegon UK is the first investor in the newly launched HSBC Developed World Sustainable Equity Index fund. Focusing on their Aegon Retirement Choices (ARC) funds range, the newly launched fund aims to reach a total of around 30% of assets for members within six months.
For those invested in the Aegon Workplace Default Retirement funds, 15% will be invested in ESG components on completion of the process. Once complete, this will equate to £1.68bn investment in the fund.
The newly launched HSBC fund targets three key areas:
1) 20% uplift in ESG score.
2) 50% carbon emissions intensity reduction (relative to parent index).
3) 50% of fossil fuels reserves intensity reduction (relative to parent index).
Similar to most ESG funds, the new HSBC fund excludes companies from specific sectors. These sectors include adult entertainment, arms trading and the tobacco industry.
In addition, the fund also incorporates a custom exclusion list based on company performance against the ten principles of the UN Global Compact.
The partnership is beneficial to both parties. HSBC GAM, a passive and responsible investing leader, increases its exposure to the UK market. Aegon UK takes a step towards its 2050 zero-carbon emissions target.