HSBC - ESG Book

Client Requirement

HSBC identified ESG Book as its preferred data provider to power a new index that tracks the performance of 1000-plus liquid stocks of companies expected to benefit financially from improvements in their ESG risk.

ESG Book calculates the ESG score of each constituent of the Index by deploying natural language processing to mine relevant public sources daily, such as ESG-related news and NGO data.

The ‘ESG momentum score’ is then computed every six months to determine whether each constituent has improved their ESG credentials. Investors are able to invest in a range of products tracking the Index, allocating capital toward ‘ESG improvers’.

The HSBC ESG Risk Improvers Index enables investors to gain exposure to stocks exhibiting ESG momentum — a useful financial indicator of future performance.

Patrick Kondarjian
Global Head of Sustainability for Markets & Securities Services, HSBC

The Results

ESG Momentum

Through the partnership with ESG Book, the HSBC ESG Risk Improvers Index enables investors to gain exposure to stocks exhibiting ESG momentum — a useful financial indicator of future performance.

Next-generation Data

This is in contrast to traditional ESG best-in-class, or ESG integration, investment approaches that purely target high ESG ratings – agnostic to whether the stock’s ESG credentials have recently improved or deteriorated.