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HSBC RadiantESG US Smaller Companies I RESCX Sustainability

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Sustainability Analysis

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Sustainability Summary


HSBC RdtESG US Smlr Cmp has a number of positive attributes that a sustainability-focused investor may find appealing.

This fund has a Morningstar Sustainability Rating of 5 globes, indicating that the ESG risk of holdings in its portfolio is rather low relative to those of its peers in the Morningstar US Equity Small Cap category. ESG risk measures the degree to which material environmental, social, and governance issues, such as such as climate change, biodiversity, human capital, as well as bribery and corruption, could affect valuations. ESG risk differs from impact, which is about driving positive environmental and social outcomes for society’s benefit.

HSBC RdtESG US Smlr Cmp holds itself out to be a sustainable or ESG-focused investment. In other words, ESG concerns are central to the investment process of this strategy. A fund with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes. One key area of strength for HSBC RdtESG US Smlr Cmp is its low Morningstar Portfolio Carbon Risk Score of 7.66 and low fossil fuel exposure of 1.29% over the past 12 months, which earns it the Morningstar Low Carbon Designation. Thus, the companies held in the portfolio are in general alignment with the transition to a low-carbon economy.

Hsbc Rdtesg Us Smlr Cmp shows 9.5% involvement in carbon solutions. This percentage surpasses the 6.0% average involvement of its peers in the Small Growth category. Carbon solutions include products and services related to renewable energy, energy efficiency, green buildings, green transportation, and so on.By prospectus, the fund aims to avoid, or limit its exposure to, companies associated with controversial weapons, tobacco, and thermal coal. The fund fulfills this goal as its investment exposure to each of these activities is negligible. The fund has no exposure to high or severe controversies. Controversies are incidents that have a negative impact on stakeholders or the environment, which create some degree of financial risk for the company. Examples of types of controversies include bribery and corruption scandals, workplace discrimination and environmental incidents. Severe and high controversies can have significant financial repercussions, ranging from legal penalties to consumer boycotts. Such controversies can also damage the reputation of both companies themselves and their shareholders.

ESG Commitment Level Asset Manager