Student Team from Kuwait University Wins 2022 ESG Trading Initiative
Toronto – A new program which promotes the development of sustainable finance skills for university students in the Middle East is launching its second iteration this fall. The HSBC Environmental, Social and Governance (ESG) Trading Initiative is a four-month learning experience supported by HSBC Bank Middle East Limited and the University of Toronto’s Rotman School of Management that focuses on environmental and sustainable practices in financial decision-making.
Teams of four students from forty-two universities in the United Arab Emirates, Oman, Qatar, Kuwait, Bahrain, Egypt, and Algeria will participate in two ESG driven competitions: Rotman Portfolio Management Competition @ HSBC (RPMC@HSBC) and Rotman International Trading Competition @ HSBC (RITC@HSBC). In both competitions, in addition to overall financial performance, students must consider ESG ratings in their trading and investing decisions.
The initiative builds on the success of student trading competitions hosted annually by the Rotman School in Canada, Europe and Asia, including the first offering of the HSBC Trading Initiative this past year.
Teams applied ESG metrics to their decision-making in a simulated environment using the resources in the Rotman School’s BMO Financial Group Finance Research and Trading Lab. A student team from Kuwait University was declared the overall winner. The initiative attracted more than 140 participants including student traders, analysts and risk managers representing 15 universities from across the Middle East including United Arab Emirates, Oman, Qatar, Kuwait, Bahrain, Egypt, and Algeria. Overall, a team from Egypt’s Cairo University placed second while a team from Zayed University in the United Arab Emirates finished third. Another two teams from Cairo University placed fourth and fifth, and a team from Hamad Bin Khalifa University in Qatar placed sixth. In the RITC@HSBC 2022 competition, Zayed University team received the best performing team award and Cairo University the best ESG portfolio manager award. In the RPMC@HSBC 2022 competition, Kuwait University team received the ESG Decision case best performer award team and the overall best performing team award. The team from UAE’s Al Qasimia University received the liquidity risk case best performer award.
The portfolios developed by the first cohort of participants are expected to achieve an average of 43.8% emission reduction in the next eight years, demonstrating students’ understanding of the impact on emission level reduction.
Increasing ESG skill readability and student understanding of ESG score integration in portfolio management are the main goals of the HSBC Trading Initiative. Through information sessions provided by HSBC experts, industry partners, and UofT Faculty, students are introduced to ESG methodologies, principles, ESG transition frameworks and best practices.
Encouraged to put theory into practice, students are invited to develop and test their own ESG portfolio strategies using the BMO Financial Group Finance Research and Trading Lab’s in-house RPM and RIT software.
The Rotman Portfolio Manager (RPM) allows users to experience the financial markets in a real-time environment while the RIT Market Simulator and associated Decision Cases platform is an electronic exchange that matches buyers and sellers in an order-driven market on which decision cases are run. Both give participants an invaluable experience in a safe – yet high stakes – intellectually stimulating environment.
“In its second year, HSBC is committed to supporting the sustainable finance skills of the next generation. Our partnership with the University of Toronto has allowed us to bring the best in class trading training to university students across the region. Embedding sustainability skills across the learning curriculum is key to achieve the just net zero transition,” said Sabrin Rahman, Managing Director and Head of Sustainability for Europe and the Middle East at HSBC Bank Middle East Limited.
“Our Rotman competitions and platforms allow participants to test their financial trading and investment theories safely in real-time. The goal for the HSBC initiative is to create a sustainable future of finance by developing advanced skills in sustainable financial literacy in the next generation of leaders from the region,” says Bachir Chehab, associate director of the Lab at the Rotman School
In 2019, 2020 and 2021, Euromoney named HSBC as the World’s and Middle East’s “Best Bank for Sustainable Finance”, reflecting the strategic importance of sustainability to the bank and its customers. HSBC’s leading ESG strategy in the Middle East is as follows:
- Committed to net-zero across the region to engage with clients on ESG, sustainable finance, and their transition strategies.
- Played a role in every public green, social and sustainable bond issuance in the region, have spearhead the development of green trade and transition financing, and substantially increased our balance sheet of green, social and sustainable lending across the Middle East.
- Engaged with all our stakeholders on ESG and supported regional regulators with increasing guidance and policies, developing thought leadership and regularly hosting an array of webinars on ESG themes for our clients and the wider sustainable finance sector.
- Launched and supported several social programmes that upskill and develop regional youth, SMEs, and those most in need of financial education.
“Our initiatives are designed in a way to support our next generation of leaders in the building, enhancing, or even acquiring new skills in decision making, market simulation, strategy development, ESG, and many more using our simulation-based-learning approach that prove to be crucial’ in the student learning journey,” said Bachir Chehab, Associate Director at the BMO Financial Group Finance Research and Trading Lab.
HSBC is the largest and most widely represented international banking organization in the Middle East, North Africa and Turkey (MENAT), with a presence in nine countries across the region: Algeria, Bahrain, Egypt, Kuwait, Oman, Qatar, Saudi Arabia, Turkey and the United Arab Emirates. In Saudi Arabia, HSBC is a 31% shareholder of Saudi British Bank (SABB), and a 51% shareholder of HSBC Saudi Arabia for investment banking in the Kingdom. Across MENAT, HSBC had assets of US$71bn as at 31 December 2021.
The BMO Financial Group Finance Research and Trading Lab at the Rotman School of Management is designed to promote experiential learning: integrating markets, data and research with practice making financial decisions. The highly acclaimed RIT Market Simulator developed by the Lab is used by 60 universities and financial institutions around the world. The Lab is utilized by classes in many of Rotman School programs including its Master of Finance, Master of Financial Risk Management, MBA, and Rotman Commerce programs. Further information on the lab is available online.
The Rotman School of Management is part of the University of Toronto, a global centre of research and teaching excellence at the heart of Canada’s commercial capital. Rotman is a catalyst for transformative learning, insights and public engagement, bringing together diverse views and initiatives around a defining purpose: to create value for business and society. For more information, visit www.rotman.utoronto.ca.