ASSET manager Van Lanschot Kempen said its ESG test – which caused Singapore state-backed assets to land on one of the firm’s blacklists and prompted a collective response across the nation’s ministries – only applied to advanced mandates used by some pension fund clients.

On Jun 9, Bloomberg reported that Singapore had failed an updated ESG (environmental, social and governance) test used by Kempen to screen for environmental risks. A Kempen senior executive told the news agency that “the direction of travel in both biodiversity and climate is in reverse” in Singapore.

A statement issued by several Singapore government agencies and ministries on Thursday (Jun 15) said the country “takes climate action seriously”, with its pledge to achieve net-zero emissions by 2050. The statement urged Kempen to learn more about Singapore’s commitments and concrete actions on sustainability.

On Friday, Kempen said in a statement: “The policy only applies to mandates used by some of our pension fund clients under our fiduciary management where ESG is further advanced; and it relates only to state-backed debt instruments and sovereign debt. The research is based on a proprietary methodology that pools data from a variety of academic institutions and non-government organizations.”

Kempen, which oversees about US$130 billion of client assets, started applying its ESG test to sovereign bonds and state-backed entities last year.