HSBC Corporate, Investment Banking and Markets announced the launch of the HSBC Global Climate Change Benchmark Index, together with a family of four investable global climate change subindices.

The new index, developed by HSBC’s global research team, is a global reference index which has been designed to reflect and track the stock market performance of key companies that are best placed to profit from the challenges presented by climate change. The performance of the benchmark has been tracked back to 2004 and has outperformed the MSCI World Index by around 70%.

From this benchmark, HSBC has established four investable climate change subindices that can be used to create portfolios for a diverse range of investment needs such as long only funds, hedge funds, exchange traded funds, discretionary funds and structured products. The indices are: HSBC Climate Change Index; HSBC Low Carbon Energy Production Index (including: solar, wind, biofuels, geothermal); HSBC Energy Efficiency & Energy Management Index (including: Fuel Efficiency Autos, Energy Efficient Solutions, fuelcells); and, HSBC Water, Waste & Pollution Control Index (including: water recycling, waste technologies, environmental pollution control).

Joaquim de Lima, global head of quant research for equities, said, “What makes this different and exciting is the index structure which captures a highly diverse number of investment themes with very attractive risk return characteristics. The construction and stock selection of the indices is based purely on quantitative criteria such as value generation and liquidity and these factors will be regularly reviewed.”

Nick Robins, head of HSBC’s Climate Change Centre of Excellence, who will act as an adviser on the index, commented, “Climate change is set to be one of the defining investment opportunities in the years ahead. This index series captures both the imperative of reducing greenhouse gas emissions and the need to adapt to the physical impact of climate change.”