Banking giant HSBC has released research

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  • 01 Apr 2020
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Companies Focused on Climate Change 'outperformed' as Virus Spread

Banking giant HSBC has released research that suggests greener stocks’ relatively impressive performance is largely holding true throughout the coronavirus crisis. HSBC analysed 613 shares of global public companies valued at over $500 million where climate solutions generate at least 10 percent of revenues, as well as the 140 stocks with highest ESG scores and values above the global average. It then analysed the stocks’ performance between the start of the crisis and when it escalated sparking high levels of market volatility. It found that in the pandemic’s early weeks, shares in ESG-aware companies outperformed the market, although with some big regional differences. The climate-focused stocks outperformed others by 7.6 percent from December and by 3 percent since February, while the ESG shares beat others by about 7 percent for both periods. The hypothesis is that companies with good governance practices and high levels of exposure to long term growth markets, such as clean technologies, should find themselves better positioned to manage short term economic shocks and subsequent recovery.

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