DBS adopts MSCI ESG Ratings for wealth management business

Singapore

TO provide clients with greater transparency over environmental, social and governance (ESG) characteristics of their investment portfolios, DBS has adopted the MSCI ESG Ratings for its wealth management business.

MSCI ESG Ratings score companies on their ESG risk exposure and risk management abilities relative to industry peers. This serves as an additional tool for investors to assess how their investments measure up to others to make more informed decisions.

The MSCI ESG Ratings, which was adopted by DBS since November last year, will be embedded in its suite of wealth products, advisory and discretionary portfolio services.

The inclusion of the ratings in DBS' products and services comes amid mounting interest in ESG investing.

ESG investing has been gaining traction among millennial investors in Asia. According to the CFA Institute, ESG assets under management in Asia have been the fastest growing since 2014 on the back of the impending inter-generational transfer of wealth to sustainability-conscious millennial investors.

Some 90 per cent of high net worth millennials surveyed are looking to increase their allocations to responsible investments within five years, according to a 2017 FactSet study.

Wealth clients of DBS will be able to access these ratings through their relationship managers upon request.

DBS is also looking into leveraging this capability to introduce ESG offerings in retail applications.

While clients are more aware of the relationship between ESG practices and strong corporate financial performance, their decision-making process is often hampered by the lack of historical ESG data or a recognised sustainability benchmark, according to Marc Lansonneur, head of managed solutions, balance sheet products and investment governance at DBS Wealth.

"By adopting MSCI ESG Ratings and enabling transparent comparability, we hope to address this gap and drive growth in the ESG investing space," he added.