Stanchart flies sustainable-investing flag

Singapore

SUSTAINABLE investing has become more of a buzzword lately and Standard Chartered, a pioneer in the field, believes it is positioned to enact greater positive change.

Last October, the international banking group helped launch the world's first "blue" bond, one raised by the Republic of Seychelles.

(Blue bonds are debt instruments issued by governments, development banks or others to raise capital to finance marine and ocean-based projects that have positive environmental, economic and climate benefits.)

Add to that the bank's decision last September to stop funding new coal plants, and it becomes clear that it is serious about "Contributing to Sustainable Economic Growth" - one of its "Sustainability Aspirations" pillars.

The head of sustainable investing at Standard Chartered Private Bank, Eugenia Koh, said: "If you look at the global trends, sustainable investing is actually not new. It had its roots way back when the pension funds of the churches and religious groups wanted to invest based on their values.

"But I think over the course of the last 20 years, it has really grown and evolved quite a bit."

Some trends have heightened interest in sustainable investing, such as millennials being more socially conscious, especially in how they choose to invest, she said.

And after the United Nations' Sustainable Development Goals were introduced in 2015, there was a more concerted effort to get the various stakeholders to collaborate to achieve those goals, she noted.

Finally, people have also recognised that there is better risk management and good corporate governance with sustainable investing.

For retail investors interested in sustainable investing, Standard Chartered offers a number of options; these range from ESG funds (mutual funds that incorporate good ESG principles) to stocks of companies which publicise what they are doing in the ESG space.

Ms Koh said: "There are some funds out there which use 'best-in-class incorporation' of ESG principles, which means they select companies which are managing ESG risks and opportunities well."

For ultra-high net-worth individuals, Standard Chartered Private Bank offers the Impact Philosophy app, which helps clients identify the sectors in which they want to make an impact.

For a start, these individuals are asked to identify their desired beneficiary, such as women and girls or any of the nine beneficiaries available.

Next, they are asked to choose their sector of concern, which can range from ageing to climate resilience.

Thereafter, these private-banking clients will be clearer about what their focus areas are, and the metrics that can be used to measure the effectiveness of their investments.

They will be shown how their focus areas align with the SDGs, and also decide how they would like to use their financial or non-financial resources.

This framework enables Standard Chartered Private Bank to enter into discussions on the investment opportunities available, ranging from private equity products to direct investments or partnerships with organisations, so as to help shape the work that these groups are doing.

Emphasising the need for collaboration, Ms Koh said: "Everyone across the ecosystem plays a role and that's the beauty of it. It's a space where you need everyone to come together."

Sustainable investing is just one part of Standard Chartered's sustainability agenda, which includes other pillars such as "Contributing to Sustainable Economic Growth", "Being a Responsible Company" and "Investing in Communities".

"Being a Responsible Company" entails reducing the bank's carbon footprint; "Investing in Communities" relates to helping the community achieve employability, among other initiatives.

Winnie Tan, head of community engagement and sustainability at the bank, said Standard Chartered works, for example, with the Infocomm Media Development Authority (IMDA) and the National Library Board (NLB) on digital literacy for seniors.

"We get our IT colleagues to go and reach out to senior citizens to teach them simple things, including how to use an iPhone and how to download certain apps."

Ms Tan, referring to Standard Chartered's decision last year to stop funding new coal plants, said: "Continuing without changing or not implementing such (environmental) policies will have detrimental outcomes that will be far larger than economics. That was the reason behind our move to stop financing new coal plants."

Standard Chartered's holistic sustainability efforts are a practical testimony to its tagline - that the bank is "here for good".