HSBC establishes climate change research programme

Source: HSBC Global Markets

HSBC Global Markets today announces the creation of a Climate Change Research Facilitation Programme (the 'Programme'), in association with:

  • Ernst & Young - Renewable Energy and Environmental Infrastructure Advisory
  • New Energy Finance,
  • Risk Management Solutions ('RMS'),
  • The UK Met Office.

    As the potential impacts of Climate Change on investment portfolios are examined by fund managers globally HSBC Global Markets has brought together a number of leading research providers outside banking to offer highly specialist research from independent companies.

    HSBC is ideally placed to launch this initiative having already successfully sponsored another multi party collaborative effort to help research the impact of Climate Change through the HSBC Climate Partnership; a five-year US$100 million program to provide support for: The Climate Group, Earthwatch Institute, Smithsonian Tropical Research Institute and WWF to inspire action by individuals, governments and businesses worldwide to reduce the impacts of climate change on people, water, forests and cities.

    The need for this new Programme has been highlighted to HSBC through its meetings with global investment managers to discuss the HSBC Climate Change Index which was launched last September 2007 and built by HSBC's Quantitative Research Team in consultation with Lord Nicholas Stern. This global benchmark index is designed to reflect and track the stock market performance of key companies best placed to benefit from the challenges presented by climate change. With over 390 companies captured globally the index has highlighted that significant industrial realignment has already commenced in the path to a low carbon economy and with this the further requirement for much more specialised research.

    Samir Assaf, Head of Global Markets, HSBC Global Banking and Markets said: "Climate change is set to be one of the defining investment opportunities in the years ahead. Companies are realising that they have to adapt to meet the challenges of climate change. In their investment decisions, fund managers base selection on the best research available, and HSBC's partners in this initiative are clear market leaders in their field. Fund managers gain one central resource for research and can be sure that this is the most comprehensive available."

    The Programme is open to all fund managers interested in independent research from specialist houses. The number of participants in the Programme can grow as new research becomes available.

    Jonathan Johns, head of Ernst & Young's Renewable, Waste and Cleantech, added: "Investing in renewables, cleantech and waste is an increasingly important part of any coherent climate change investment portfolio strategy."

    "We are delighted to be involved in this initiative. HSBC is to be commended for its innovative approach to providing fund managers with the available expertise they need to consider how climate change will impact their portfolios."

    Michael Liebreich, Chairman and CEO of New Energy Finance, said: "Investment in clean energy and the carbon markets is growing rapidly in every country of the world.

    But it is a tough industry for investors to master: you have to be an expert on everything from energy markets to nanotechnology, from commodities to policy, from electrical engineering to behavioural science. So it is far from easy for investors to separate the winners from the also-rans, and there is absolutely no substitute for quality, in-depth research."

    "We've seen a surge in the demand for weather and catastrophe risk modelling analytics to help address climate change impacts," said Dr. Celine Herweijer, director of the RMS climate change practice. "Prudent businesses are beginning to ask how and where climate change will materially impact their operations, value chain, investments and wider commercial environment. They realise that climate change is not only altering their risk landscape, but necessitating a longer-term outlook, and that understanding this future risk is the first step to reducing it."

    Robert Napier, Met Office Chairman said: "The impact of climate change and weather on our world has been accepted by the finance industry as a key driver of financial decision making. Through the use of our expert research and advice, fund managers will be able to better manage their risks and adapt portfolios to meet the challenges of our changing climate."
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