The Trustee’s approach to ESG risk management

Please note this page relates to how the Trustee is managing ESG risks in relation to your DC pension pot not your DB benefits. 

When HSBC and/or you contribute into your Defined Contribution (DC) pension pot, the money is invested in things like shares (company equity), government bonds (gilts), and corporate bonds (company debt). The aim is to give your DC pension pot the chance to grow in value over the long term.

The Trustee offers different ways for you to invest your money in your DC pension pot. The Trustee doesn't directly manage your money. Instead, it sets the investment strategies for the default investment options and gives members a range of self-select investment funds to choose from to invest their own DC pension pot in. Then the Trustee appoints investment managers to manage members’ investments on a day-to-day basis.

Investing for the long-term means managing future risk

When the Trustee sets the default investment option strategies and chooses the investment managers for both the default investment options and the self-select investment funds, it takes a lot of factors into account. These include the way in which environmental, social and governance (ESG) issues could affect your DC pension pot investments. For example, if a company has a negative effect on society or the environment, or is poorly run, its share price can fall, leading to lower returns for its investors. However, if a company is well managed and meets a genuine environmental or societal need, the financial returns for investors may be higher.

ESG covers a wide range of issues from climate change through to health and safety concerns, pollution and corrupt practices. And because many of these issues may not become evident for years or even decades, they often require trustees of pension schemes, their advisers and investment managers to take a long-term view.

ESG is part of our focus for the next decade

The Trustee is focused on giving members high-quality retirement options that will help them realise their retirement ambitions. This involves balancing many investment risks, including how ESG risks are managed. That's why the Trustee has made managing ESG risk and identifying the opportunities that ESG issues open up an integral part of its approach for the last 10 years. It’s also why in October 2021 the Trustee committed to achieving net zero emissions of greenhouse gases from the Scheme’s investments by 2050 or sooner.

This page sets out the Trustee’s ESG approach and what that means for your DC pension pot. The Trustee is interested in your views on this approach and will be asking some questions about it in the annual member survey.

The Trustee’s approach in detail

View our statement on Task-Force on Climate-Related Financial (TCFD) Disclosures

More Information

The Trustees commitment to net zero

The Trustee recognises the need to play an active role supporting the drive to decarbonise the economy. In October 2021, the Trustee announced its commitment to achieve net zero by 2050 or sooner.
View the announcement

Statement of Investment Principles

The Trustee has set out the policy it follows when making decisions about the investments of the Scheme. The Trustee reviews this policy from time to time with the help of its advisers.
Read the Statement of Investment Principles

Annual Implementation Statement

The Trustee reports on how the Statement of Investment Principles (SIP) has been followed each year. The Trustee also outlines any reviews of the SIP that have happened during the year and any voting by the Trustee or on its behalf.
Read the Annual Implementation Statement