- The past three to five years have seen significant change in awareness, uptake and impact of environmental, social and governance (ESG) investing in Asia.
- Stewardship codes and sustainable development goals (SDGs) are key drivers, as is support from large asset owners.
- Scant or poor-quality data for ESG metrics, a fragmentary regulatory environment across the APAC region, and outdated perceptions in the broader market on ESG investing’s potential to drive positive returns remain challenges to further growth.
A new report by The Economist Intelligence Unit (EIU) finds that among Asia’s asset owners, ESG is growing as an investment approach because in simplest terms, the returns—both in financial value and SGD outcomes—are on the rise.
The Sustainable and actionable: A study of asset-owner priorities for ESG investing in Asia report, supported by Amundi, is based on 15 in-depth interviews with top management at asset-owner firms (pension funds, sovereign wealth funds, insurance funds, development banks, etc) and finance professionals at academic or advisory organisations.
Drivers behind the rapid expansion recorded in Asia’s ESG investing are greater awareness of SDGs, an exercised influence from top asset owners and their respective governments as well as the low-risk profile of investments options that can demonstrate good governance. The research also shows that while governance is critical to ESG investing among Asia’s major asset owners, social and environmental factors are growing in importance for investment decisions—particularly in China where government policy has made a concerted shift toward reducing climate change risks.
Today, the Asia Pacific region represents the largest single share of assets under management within the top 100 asset owners in the world.
Jason Wincuinas, editor of the report, said: “An important takeaway from this research is that SGDs have far more meaning among these massive asset owners than many in the financial-services industry have assumed. SGDs inform stewardship codes, which in turn become the guidelines for directing where and how funds are invested. So it’s crucial to recognise that those top-level conversations do have real-world implications. SDGs are not merely aspirations. A lot of people in finance can be quick to dismiss SGDs as platitudes but we found there is a huge amount of support at some of the largest asset owners in the world—and within their respective governments. They take this very seriously and they are putting their money where they mouth is in the most direct way possible. Since the investor class of ‘asset owner’ controls tens of trillions of dollars, this is a significant push for ESG. And for listed companies seeking those investments, the message is clear, the era of pursuing profit above all else is over.”
Press enquiries
Briony Lin, assistant marketing manager, content solutions, Asia
+852 2585 3843
Jason Wincuinas, senior editor, Thought Leadership Asia, The Economist Intelligence Unit
[email protected]
About the research
Sustainable and actionable: A study of asset-owner priorities for ESG investing in Asia is based on extensive interviews with leadership at asset owner firms and finance professionals at academic or advisory organisations. Research was conducted over several months.
About The Economist Intelligence Unit
The EIU is the thought leadership, research and analysis division of The Economist Group and the world leader in global business intelligence for executives. We uncover novel and forward-looking perspectives with access to over 650 expert analysts and editors across 200 countries worldwide. More information can be found on www.eiuperspectives.economist.com. Follow us on Twitter, LinkedIn and Facebook.
About Amundi
Amundi is Europe’s largest asset manager by assets under management and ranks in the top 10 globally. It manages 1,476 billion euros of assets across six main investment hubs. Amundi offers its clients in Europe, Asia-Pacific, the Middle East and the Americas a wealth of market expertise and a full range of capabilities across the active, passive and real assets investment universes. Clients also have access to a complete set of services and tools. Headquartered in Paris, Amundi was listed in November 2015. For more information visit amundi.com
