Sustainable Finance Disclosure Regulation

The EU Sustainable Finance Disclosure Regulation ("SFDR") requires HSBC Wealth and Personal Banking ("WPB") in our capacity as a financial advisor to disclose whether and how we integrate sustainability risks in our investment advice.

We recognise that sustainability risks (meaning an environmental, social or governance ("ESG") event or condition) can lead to outcomes that may have a material negative impact on the value of clients’ investments. In our due diligence selection process to create the recommended universe of investment products, we will review the disclosures from our Financial Market Participant partners and assess how they have incorporated material sustainability risks/issues, among other factors which might also have an effect on performance, in their investment process and engagement activities (where applicable). We apply this process to investment funds and insurance-based investment products.

When selecting and advising on investment funds or insurance-based investment products, WPB takes into consideration the sustainability risk within the definitions and applicability of Sustainable Investment or EU Taxonomy. Financial Market Participants of products that either have specific sustainable investment objective (SFDR Article 9) or products that promote environmental or social characteristics (SFDR Article 8) are required to report their contribution to sustainable investment and EU taxonomy. Doing no significant harm to other environmental or social objectives and following good corporate governance processes / social safeguards are required under Sustainable Investment and EU Taxonomy contribution.  We gather this data through the European ESG Template (EET).  
Should you require further information about how sustainability risks are incorporated in the products which we advise on, please contact your HSBC Financial Advisor.

Version: 1.1 - Publication date: 11 November 2024

The EU Sustainable Finance Disclosure Regulation ("SFDR") requires WPB, in our capacity as a financial advisor, to disclose whether and how we take into account principal adverse impacts on sustainability factors in our investment advisory process.

We use information published by Financial Market Participants ("FMPs") and a minimum set of adverse impacts that we evaluate for the suite of ESG and sustainable investing products (as classified according to our proprietary internal framework) that we advise on. We apply this process to investment funds and insurance-based investment products.

When selecting and advising on financial products, WPB takes into account some of the adverse impact of the underlying investment on sustainability factors, based on data availability and alignment of client’s sustainability preferences and investment objectives.

For products that we have approved as ‘sustainably invested’ according to our proprietary internal framework and that have either specific sustainability goals as an objective (SFDR Article 9) or promote environmental or social characteristics (SFDR Article 8), we take into consideration certain Principal Adverse Impact Indicators ("PAIs"). These PAIs include exposure to controversial weapons and exposure to UN Global Compact violators and or OECD Guideline for Multinational Enterprises on Responsible Business Conduct violators.

Version: 1.1 - Publication date: 11 November 2024

Pursuant to article 5 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on SFDR, HSBC Bank Malta plc is required to:

(i) include in its remuneration policy, information on how the said policy is consistent with the integration of sustainability risks, and

(ii) publish and maintain this information on its website.

The remuneration policy, which can be found on the Investor Relations page of HSBC Bank Malta plc, is consistent with the integration of sustainability risks. To this end, HSBC Bank Malta plc has adopted sustainable remuneration practices which are geared towards mitigating the potential adverse effects (if any) of its variable remuneration model on the risk profile of the Company. Indeed, even though the Company’s variable pay pool is expected to fluctuate in accordance with its overall business performance, any variable remuneration awarded to the Company’s employees shall be linked to the achievement of pre-defined targets which would have been set by the Company at beginning of the year.

The main quantitative and qualitative performance and risk metrics used for the assessment of employee performance against the pre-defined targets referred to above are included in a balanced scorecard of clear and relevant objectives. The objectives included in the performance scorecards of senior management take into account appropriate measures linked to sustainability risks, such as: reduction in carbon footprint; facilitating financing to help clients with their transition to net zero; employee diversity targets; and risk and compliance measures. Additionally, a mandatory and measurable sustainability goal such as training is assigned to all employees across the board. The employees receive a behaviour rating as well as a performance rating, which ensures that performance is assessed not only on what is achieved but also on how it is achieved – thereby minimising the risk of engaging in undesirable practices (such as, for instance, behaviour which is to the detriment of the Company’s sustainability efforts and/or adherence to sustainability-related laws and regulations) for the purpose of driving business and improving their financial performance at all costs.

Version: 4.0 – Publication date 09 January 2025