LONDON/WASHINGTON, May 20, 2020—HSBC Global
Asset Management and IFC, a member of the World Bank Group, today announced
the third closing of the HSBC Real Economy Green Investment Opportunity
GEM Bond Fund (REGIO), which has raised $474 million of new financing
to support climate mitigation investments across emerging markets in spite
of prevailing market turmoil.
Emerging market countries have been hit by
some of the worst impacts of climate change and many are insufficiently
equipped to address them. REGIO is designed to attract investments into
these economies, enabling their energy transition and helping them limit
the effects of climate change.
The first green bond fund focused on emerging
market real sector issuers, REGIO will use both public and private capital
to build climate change mitigation capacity in emerging market economies.
HSBC and IFC each committed $75 million to the fund as anchor investors.
Seven private investors have now joined HSBC and IFC, with others expected
to commit later this year.
Noel Quinn, Group Chief Executive, HSBC,
said: “At HSBC we have a long history of connecting markets with opportunities
and we recognise that economic growth must be sustainable over the long
term. Investors want more socially and environmentally responsible investment
opportunities and funds such as REGIO are a way for them to achieve their
Philippe Le Houérou, CEO of IFC, said:
“The success of this fundraising is proof that investors remain committed
to fighting climate change, even at this time of global pandemic. IFC is
proud to have helped shape climate finance capital markets by issuing and
investing in green bonds and establishing market standards. Innovative
solutions like this fund create tangible action on the ground at a time
of great urgency.”
Through its investment, REGIO will both catalyse
climate finance globally and create viable markets for the development
of climate-friendly projects. The fund provides a solution for global institutional
investors to achieve impact and generate sustainable returns at the same
time. The fund will invest in a diverse range of geographies and companies
in the real sector through a diversified portfolio of green and sustainable
Nicolas Moreau, Global CEO, HSBC Global
Asset Management, said: “We are at a tipping point in terms of climate
change and investing in the real economy in emerging markets is critical
to achieving the global transition to a lower carbon economy. Funds such
as REGIO prove how we can achieve real economy impact in the markets that
are most challenged by it.
“To achieve a close of this size in the
current market environment proves the importance that institutional investors
place on impact investing in emerging markets. We recognise the role we
can play in enabling our clients to meet their sustainable investment objectives
and support the Sustainable Development Goals. We hope that the green impact
investment framework behind REGIO and its commitment to sustainable development
is something that will be taken up by the wider industry.”
The fund is supported by HSBC Global Asset
Management’s ‘Green Impact Investment Guidelines’ which set out
a framework for the firm’s green impact strategies across asset classes,
including eligible projects and activities aligned with impact. The framework
aims to show potential bond issuers the eligibility criteria the firm will
apply when selecting green bonds for REGIO. The framework is aligned to
the SDGs and their targets and indicators and contributes directly to financing
the objectives of the Paris Climate Agreement.
To bolster the supply of green bonds issued
by real sector borrowers, REGIO’s investment activities will also be complemented
by a Technical Assistance Facility managed by IFC.
IFC—a sister organization of the World Bank
and member of the World Bank Group—is the largest global development institution
focused on the private sector in emerging markets. We work in more than
100 countries, using our capital, expertise, and influence to create markets
and opportunities in developing countries. In fiscal year 2019, we invested
more than $19 billion in private companies and financial institutions in
developing countries, leveraging the power of the private sector to end
extreme poverty and boost shared prosperity. For more information, visit
About HSBC Global Asset Management
HSBC Global Asset Management, the investment
management business of the HSBC Group, invests on behalf of HSBC’s worldwide
customer base of retail and private clients, intermediaries, corporates
and institutions through both segregated accounts and pooled funds. HSBC
Global Asset Management connects HSBC’s clients with investment opportunities
around the world through an international network of offices in 25 countries
and territories, delivering global capabilities with local market insight.
As at 31 March 2020, HSBC Global Asset Management managed assets totalling
US$483bn on behalf of its clients. For more information see www.global.assetmanagement.hsbc.com
HSBC Global Asset Management is the marketing
name for the asset management businesses of HSBC Holdings plc.
About HSBC Holdings plc
HSBC Holdings plc, the parent company of
HSBC, is headquartered in London. HSBC serves customers worldwide from
offices in 64 countries and territories in its geographical regions: Europe,
Asia, North America, Latin America, and Middle East and North Africa. With
assets of US$2,918bn at 31 March 2020, HSBC is one of the world’s largest
banking and financial services organisations.