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Stanchart's take

SUSTAINABILITY

Why do companies need to concern themselves with the Triple P bottomline (people, planet and profit)? How will they benefit from doing so?

There has been a growing demand for companies to focus on building not just high performing businesses, but to do so in a sustainable way.

Last year, the Singapore Exchange introduced sustainability reporting on a "comply or explain" basis, looking for firms to include a board statement to describe the company's sustainability actions, identify environmental, social and governance factors that affect business strategies, explain their practices and performances, and set targets.

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Beyond just reporting obligations, we believe that companies can gain a competitive advantage as they drive the triple bottom line and integrate social good directly into their business models.

The 2015 Nielsen Global Corporate Sustainability Report showed that 66 per cent of all consumers are willing to spend more for products that come from sustainable brands.

As consumers demand more socially conscious behaviours from the brands they buy, businesses which respond to this ahead of their competitors stand to win a larger share of the market.

From a long-term perspective, research has found that sustainable companies perform better than their peers, and are better able to respond to changes in the operating environment.

From an investor perspective, we are seeing increasing interest from clients in investing in both triple bottomline companies, and especially in the area of impact investments.

Our 2016 private banking client survey revealed that globally, about 10 per cent of our private banking clients across Asean and South Asia are interested in impact investing.

Standard Chartered Private Bank estimates that AUM in impact investing could grow from the current US$77 billion to between US$300 billion and US$400 billion by 2020, largely driven by the increase in millennial wealth.

This increase is expected to be driven by wealth creation from this generation, as well as inter-generational transfers from current billionaires to their millennial heirs.

  • The writer is market head, Singapore & Malaysia, Standard Chartered Private Bank.

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