Asia on course to soon overtake the US on ESG adoption

FOR more than a decade, the vanguard of ESG (environmental, social and governance) awareness and adoption has been the Europeans, closely followed by the Americans. In the investment industry, the often main refrain from Asian investors was to "let the Europeans do good". Investors in the Asia-Pacific region took the very pragmatic view that it was not an investor's role to influence or impact society, but rather to achieve the highest possible returns.

That same Asian pragmatism is now one of the major reasons for the acceleration of ESG adoption in the Asia-Pacific. Like their counterparts globally, most investors in the region now realise that ESG is not merely about "doing good", but it is about finding the best companies that have the best chance to excel and succeed - and to do so in a sustainable way.

While ESG is mired in political debate in the US around whether a specific set of social values is being imposed upon asset managers and pension plan sponsors, it is establishing a firm foothold in the Asian investment landscape.