London, 17 December 2009 

Buoyed by large and direct government investments into clean energy and manufacturing capacity, Asia ex Japan leads the way in providing goods, products and services focused on tackling Climate Change outperforming global equities by 63% since 2004 compared to a underperformance of 33% by the US, according to the latest findings from the HSBC Climate Change Index (the ‘Index’). 

Building on the success of the HSBC Climate Change Benchmark Index, the first comprehensive Climate Change Index launched back in 2007, HSBC today announced the launch of both regional and country Climate Change Indices, giving clients – for the first time - the opportunity to invest in specific elements of global climate change on a selective and focused basis.

These indices, based on the same quantitative framework as the benchmark index, will enable investors and asset allocators to track and monitor climate-related investments and the transition from a high to low carbon economy for listed companies on a global, regional and country basis for the first time. In practice, this means that clients can now build a climate change portfolio with targeted exposure to one country or region – such as Asia Pacific ex Japan, which has already risen by 78% this year – which may better fit their overall investment strategy and objectives.

Joaquim de Lima, Global Head of Quant Research for Equities at HSBC, said: “With long-term interest rates low, investors are on the lookout for new growth areas and many governments are keen to play their part by creating a regulatory framework that encourages climate change measures. It’s increasingly clear that governments and investors alike are convinced that Climate Change is both real and a viable business opportunity. However, as this sophistication has grown, so has the need to offer greater granularity and investment opportunity.”

Vijay Sumon, an index specialist at HSBC, added: “Many western countries have relied on corporates acting to tackle climate change, but in Asia we’ve seen governments actually taking the lead: 46% of global climate change stimuli spend is concentrated in Asia ex Japan according to our Index framework. Many clients are looking at this closely and are becoming increasingly interested in gaining exposure to climate-related investment opportunities focussed on specific countries and regions.”

Kevin Bourne, Head of eEquities and business sponsor of the Index added: “This is particularly important for portfolio construction as fund managers can now not only focus on one specific country or region but to actively short one and go long another within the framework of an Index.”

About the Climate Change Index

This rapidly emerging sector was first clearly defined in 2007 by groundbreaking work from the HSBC Quantitative research team led by Joaquim de Lima in consultation with Lord Stern. It has grown from 166 companies when first measured as of January 2004 to 300 companies when launched in September 2007 through to 380 companies today

Formally launched in September 2007, HSBCs proprietary industrial classification model for Climate Change was specifically constructed to capture and track on a purely quantitative basis the stock market performance of companies globally that are best placed to profit from the challenges presented by climate change and the transition to a low carbon economy. The Index excludes companies whose engagement in the subject has yet to become meaningful to their revenues.

Ends --