Interest is growing among asset owners across Asia in environmental, social and governance (ESG) factors, spurred by the resilience of ESG funds during the market volatility amid Covid-19.
This was clear from the survey, entitled “Does ESG Matter?", launched to understand how, why and where ESG themes and related processes are impacting portfolios and asset allocation.
Key take-aways of senior investment executives from 38 institutions across Asia - representing over $1.5 trillion in AUM - included:
- 71% of respondents point to either a "high" or "medium" likelihood of increasing ESG factors in their portfolios over the next 12 months
- The three most ESG popular investment themes in 2020 are: clean energy; lower carbon emissions; and improved governance
- Amid various drivers to incorporate ESG considerations in investment decisions, 24% say their motivation is to enhance the public image of the organisation, with the same number looking to improve returns
- As at the end of the first quarter of 2020, 68% had less than 10% of their portfolio invested in ESG-related mandates
- Their two biggest concerns about embracing ESG are a lack of quality or standardised data, and a limited understanding internally about the value of ESG
- 37% believe clearer governance and ESG processes internally would help in incorporating ESG in a more meaningful way in the investment process
- 42% say the responsibility for driving ESG standards should come from governments and regulators