Four in 10 Singapore investors eyeing sustainable investments: StanChart

NEARLY four in 10 investors in Singapore are considering allocating 5 to 15 per cent of their funds to sustainable investments over the next three years, according to a report released on Monday by Standard Chartered Private Bank, the private banking arm of Standard Chartered Bank (Singapore).

The private bank's Sustainable Investing Review 2020 surveyed 1,080 investors in Hong Kong, Singapore, the United Arab Emirates (UAE) and the UK early this year on their interest in sustainable investment amid market disruptions due to the Covid-19 pandemic.

The report surveyed 600 general investors and 480 affluent and high net worth (HNW) investors in each market, except for the UK group, which did not include any general investors.

It defined general investors as those with a minimum of US$25,000 of investible wealth. Affluent investors had a minimum of US$1 million of investible wealth, while HNW investors had a minimum of US$5 million of investible wealth.

Nine in 10 survey respondents said they were interested in sustainable investments, with affluent and HNW investors displaying the highest interest.

Overall, 42 per cent of survey respondents said they were planning to invest 5 to 15 per cent of their funds in sustainable investments over the next three years.

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This figure was 39 per cent for Singapore respondents and 47 per cent for respondents from Hong Kong.

Eight per cent of investors from both Singapore and Hong Kong indicated they were looking to invest over 25 per cent of their funds in sustainable investments.

Those who had invested in sustainable investments in the past also indicated a willingness to invest further. Affluent and HNW investors were generally willing to consider allocating funds towards sustainable investments, regardless of whether they had previous experience making such investments, the report said.

"The (Covid-19) pandemic has led to a raised awareness of sustainable issues, from glimpsing a more sustainable and environmentally-friendly world to a renewed interest in investing in companies that are resilient enough to weather short-term shocks and survive for the long term," it added.

Standard Chartered Private Bank had seen a 50 per cent year-on-year increase in assets under management in recommended healthcare funds, largely driven by interest around Covid-19 and the presentation of more healthcare funds to clients.

There were also lower drawdowns in healthcare funds, both year to date and during the market pullback in March, highlighting the resilience of the healthcare sector.

"This strong performance stands out when compared to the broader equity market in particular, which has fallen 15 per cent year to date versus the funds' performance," it said.

The private bank said it expects the healthcare sector as a whole to benefit and grow over the long run in response to the pandemic.

Sumeet Bhambri, regional head of wealth management, Asean and South Asia and head of wealth management, Singapore, Standard Chartered Bank, added that the lender clocked a 90 per cent growth in assets under management for environmental, social and governance (ESG) funds on its platform since it started an ESG awareness campaign last month.

"There is definitely heightened interest and greater demand among investors in Singapore to make a positive impact on society and the environment, while still achieving their financial goals," Mr Bhambri said.

However, the report found that 45 per cent of Singapore's affluent and HNW investors were "highly apprehensive" about sustainable investing.

The report identified the top barriers to investing as apprehension and a lack of knowledge, motivation and advice.

Standard Chartered Private Bank's report found that affluent and HNW investors in Singapore came in tops among the respondent groups in their understanding of what sustainable living, responsible investing and social investing meant.

They ranked second behind respondents from Hong Kong in their understanding of ethical investing, low carbon investing, ESG investing and socially responsible investing, and came in third - behind the UAE and the UK respondents - in familiarity with impact investing.

The report also identified cultural nuances and local market experiences as major factors influencing investor personalities and investment approaches. 

When profiled according to the bank's investor personality types, Singapore investors accounted for 43 per cent of the "Resistant" type.

Such investors have a high preference for avoiding investments that are unethical or could do harm to the environment or to society, but a low interest in sustainable investing, Standard Chartered said.