Bupa, Prudential tackle Asia’s fragmented ESG landscape

A broad spectrum of regulations across Asia’s various markets presents challenges to the focus on sustainability, but they are not impossible to navigate, according to executives at the two insurers.
Bupa, Prudential tackle Asia’s fragmented ESG landscape

The challenges of formulating sustainability or environmental, social and governance (ESG) strategies across Asia’s divergent regulatory landscape can often leave asset owners feeling confused, overloaded with information and even paralysed, according to Rodney Gollo, head of risk at Bupa Asia.

Rodney Gollo,
Bupa Asia

Gollo’s approach begins with identifying the tools and mechanisms available within his firm that can be repurposed to make better capital and operation expenditure considerations that align with Bupa’s own sustainability strategy, he said at AsianInvestor’s Insurance Investment Briefing in Hong Kong on March 10.

“One of the things we started doing internally—which I find quite useful—is to use and build up our incident management process, because that can really help provide us with tangible data from within the business about where we’re having inefficiencies or pain points,” said Gollo.

This data allows his team to better quantify some of the issues and communicate them with Bupa’s stakeholders.

“There is often a lot of stakeholder engagement at the times when you're just trying to formulate these strategies. Without useful information or actual data behind your decisions, it can just feel as if you're having a very sort of superfluous conversation. So having that data helps build tangible practical actions you can align with your strategies,” said Gollo.


As can be expected from any large asset owner, UK-based insurer Prudential has a clear, responsible investment framework that it aims to apply in its Asia business, said Kerry Adams-Strump, director of group ESG at Prudential.

Also read: Prudential, Bupa: Balancing net zero goals with EM needs

“Clearly, climate considerations are potentially the most pressing, and are what we get asked about the most at the moment—but the same considerations can apply to nature preservation, biodiversity, health, tobacco and so on,” Adams-Strump told AsianInvestor.

Kerry Adams-Strump,
Prudential plc

Prudential has some strict processes and when applying its framework to the various geographies of Asia it begins with understanding exactly what companies the insurer has in its portfolio, “because that's the most important thing before we can make any decisions,” she said.

Exclusions are seen as a last resort for Prudential which prides itself on being a responsible investor with an eye on a just and inclusive transition.

The insurer says exclusions would ultimately take it out of the many conversations that are likely to have a real impact in the region.

“ESG integration is far more crucial, and we do that by being an active owner and engaging with the companies we invest in at Prudential,” said Adams-Strump.

“We have set a target to engage with the companies that are responsible for 65% of our absolute emissions, and that’s the core of us reaching our net-zero targets because we need those companies to transition.”


For Prudential, capital allocation is also an important tool to influence and send signals to the markets they operate in within Asia.

Nevertheless, there are still some unique challenges.

“There’s a lack of investable opportunities in some cases. If you have a local currency denominated liabilities, as we do in a number of our markets, we need to be able to invest our policyholders’ money in a way that respects our fiduciary responsibilities, but also allows us to finance the transition, and there just aren't enough of those yet,” said Adams-Strump.

Another challenge is the lack of appropriate global frameworks and pathways in Asia.

Many of these, she says, assume there is just one global trajectory towards net zero which doesn't necessarily reflect that different markets move at different paces.

Also read: APG lays out strategy of dealing with Asia carbon emitters

“They may be sector pathways, but they're not necessarily regional pathways. We see that as a significant challenge because one size doesn't fit all, and we can't all move at the same pace.

"If you're looking at a German steel manufacturer, and you're looking at a steel manufacturer in an emerging market in Asia, they're not going to be comparable in terms of their ability to move along the transition path,” she said.

As an international organisation domiciled in the UK, with geographic footprints all over the globe, Bupa also faces the challenge of prioritising its resources and considering the best environments to deploy its capital across Asia.  

“It’s very much tied into the regulation and political environments within a particular jurisdiction of a country and weighing the degree of certainty we can potentially have in regards to our investments,” said Gollo.

“For example, there are some markets, like Vietnam, which are seeing heavy amounts of investment attention. However, they still may not necessarily be as applicable for us to deploy our resources and capital in to at this particular moment,” said Gollo.

“It's more of a challenge of privatisation and getting very close to the regulation and tghe political environment on the ground to know which markets are the most favorable for us.”


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