Young rich Singaporeans keen on sustainable investing: survey

YOUNG rich Singaporeans are keen on sustainable investing, and they also understand that doing good can be profitable, a survey showed.

Investors in Asia are looking to increase the proportion of sustainable investments in their portfolios to an average of 19 per cent over the next three years, with Chinese investors leading the way with an expected allocation of 23 per cent by 2021, according to a Standard Chartered Private Bank survey.

Releasing the results of the survey on Thursday, the bank said over 400 investors were asked in Singapore, Hong Kong, China and India to determine their motivations behind sustainable investing and how well they understand it.

The survey looked at investors with a minimum US$1 million in investments (excluding real estate).

Investors in Singapore had the strongest understanding of sustainable investing, with 31 per cent demonstrating a good understanding of the concept, among the 79 per cent currently engaged in sustainable investing, the survey found.

64 per cent of Singapore investors were highly motivated to do good and earn a profit at the same time by making sustainable investments.

This was in contrast to Hong Kong and China where 69 and 71 per cent of investors respectively stated they were making sustainable investments to achieve better returns.

"While sustainable investing is relatively nascent in Asia, investor interest is growing and the outlook is positive," said Vic Malik, StanChart head of investment advisory, private banking, Asean & South Asia.

"We believe bridging the knowledge gap can help increase allocations towards sustainable investing and encourage investors who are not currently engaged to take the plunge," he said.

One of the misperceptions of sustainable investing is that returns have to be sacrificed but studies have found the opposite to be true.

Over 90 per cent of investment portfolios with a sustainable investment concept have the same or better returns than a normal investment portfolio. This combines the findings of over 2,000 studies across over 40 years, noted Gunnar Friede, Timo Busch & Alexander Bassen in a 2015 paper published in the Journal of Sustainable Finance & Investment.

The survey also threw up some interesting nuggets: more Singapore men (58 per cent) were interested in sustainable investing than women (42 per cent) and they were a relatively younger group, Generation X which refers to those between 35 and 49.

"Altruistic investors, largely comprising the Gen X and predominant in Singapore as compared to other markets, are more willing to accept a financial trade-off between doing good and generating returns," said Mr Malik.

"While the millennials (between 20 and 34) have been associated with driving the sustainable investing trend in Asia, we see more mature investors are also coming to the fore, motivated by the desire to leave a legacy for the next generation," noted Mr Malik.

"More importantly, millennials tend to be savvier in understanding that they do not always need to sacrifice financial gains to make a positive impact, which will be a key differentiator in further developing the ecosystem and moving sustainable investing into the mainstream.

"Globally, about 10 per cent of our private banking clients are interested in impact investing," said Mr Malik.

StanChart has also seen 40 per cent growth of global client assets under management into sustainable investing (funds/bonds) since January 2018, said Eugenia Koh, who heads the bank's impact investing and strategic engagements.

StanChart clients are able to do impact investing via the Allianz Global Sustainability Fund, Parvest Aqua Fund and BlackRock Impact World Equity.