Singapore needs to encourage ESG integration to further financial hub ambitions

SUSTAINABILITY in investing has come a long way over the past decade. Based on estimates by the Global Sustainable Investment Alliance (GSIA), assets of about US$30.6 trillion sat in sustainable investments in five major markets - the US, Europe, Japan, Australia/New Zealand and Canada - as at end-2017, a 34 per cent rise over a two-year period.

The number of signatories of the UN Principles for Responsible Investment (PRI) shows a steady uptick. As at end-March, the PRI had over 3000 signatories, representing over US$103 trillion in assets. Yet apart from Australia and Japan, the Asia-Pacific is a laggard in sustainable investments.

A joint study by the CFA Institute and PRI, published in 2019, found that while portfolio managers and analysts increasingly incorporate ESG factors into their analyses, ESG integration remained in "relative infancy" in the Asia-Pacific,with investors and analysts calling for guidance on how they can "do ESG" and integrate ESG data. The study, ESG Integration in Asia Pacific: Markets, Practices, and Data, was based on surveys of over 1000 investment professionals globally and 23 workshops in 17 markets.