Kuwait: A team of bachelor students from Kuwait University is the overall winner of the Environmental, Social and Governance (ESG) Trading Initiative 2022. This first of its kind learning experience, which concluded last month, was supported by HSBC and the University of Toronto’s Rotman School of Management. The four-month learning experience focused on promoting the development of sustainable finance skills for university students in the Middle East.

eams applied ESG metrics and decision making in a simulated environment using the resources in the Rotman School’s BMO Financial Group Finance Research and Trading Lab and participated in two competitions; Rotman Portfolio Management Competition @ HSBC (RPMC@HSBC) and Rotman International Trading Competition @ HSBC (RITC@HSBC).

Resources used included the RIT Market Simulator, an order-driven market simulator, which was developed in-house at the Rotman School; and the Rotman Portfolio Manager (RPM) which allowed users to experience the financial markets in a real-time environment. The online format allowed the student traders from across the world to connect and engage in a competitive format; as well as to network with each other. The initiative builds on the success of student competitions hosted annually by the Rotman School in Canada, Europe, and Asia.

“We are committed to playing a leading role in mobilising the transition to a global net zero economy, by helping to shape and influence the global policy agenda. The students who participated in the Rotman School and HSBC ESG Trading Initiative impressed us with their understanding, innovation and enthusiasm to develop skills and be a part of the global transition to net zero economy,” said Samer Alabed, CEO of HSBC in Kuwait. “The pace of change will greatly depend on the commitment of these young leaders in our communities.”

The increase in ESG skill readability and the student understanding of ESG score integration in portfolio management were the main goals. This was achieved by delivering and engaging with students in seven information sessions dedicated to ESG methodologies, principles, ESG transition frameworks and best practices provided by HSBC experts, industry partners, and UofT faculty. Additionally, participants were able to develop and test their own ESG portfolio strategies using RIT and RPM during the during of the initiative.

The overall portfolios developed by the initiative participants are expected to achieve an average of 43.8% emission reduction in the next eight years which demonstrates students’ understanding of the impact on emission level reduction.

“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.