Why is Asia lukewarm to sustainable investing?
For many people in Hong Kong, an international financial centre known for its freewheeling entrepreneurship, doing good and doing well is still a binary choice.
But that would be considered old-fashioned thinking in today’s investment world where a pure focus on profit is no longer sufficient, asset managers and analysts said, as firms would then miss out on long term opportunities and be exposed to operational and reputational risks and potential losses.
“There is no reason why you can’t generate [greater return] when you invest responsibly,” said Pictet Asset Management senior product specialist Marc-Olivier Buffle, who sits on the Swiss firm’s sustainability board.
“The idea that the more responsible you are the less [return] you generate is not what we believe at all.”
Investors in Asia, a region made up of numerous emerging markets that have made economic growth a priority, typically take a shorter-term view on investments. Coupled with a lack of government initiatives to drive sustainable investing, Asian investors and their fund managers have lagged far behind their western counterparts in embracing “ESG investing” – the inclusion of companies’ environmental, social and governance performance as criteria in fund allocation decisions.
Photo courtesy of Sudipto Sarkar.