Sustainable Investing Comes Of Age In Asia

An increasing number of Asian issuers and investors are starting to widen their horizons to include the impact of environmental, social and governance (ESG) issues in their considerations, a new report from HSBC says.

HSBC’s Sustainable Financing and Investing Report 2019 showed that in Asia 86 percent of investors and 84 percent of issuers said ESG factors were ‘very’ or ‘somewhat’ important to them, close behind the global figure of 94 percent and 93 percent respectively.

HSBC in Malaysia had taken the lead in sustainable investment by launching the FIRST-ever Environmental, Social and Governance (“ESG”) Islamic Structured Product in the Malaysian market. This is also in line with Bank Negara Malaysia’s Value-based Intermediation (“VBI”) initiative which seeks to ensure that the development of Malaysia financial market is consistent with the current focus on global sustainability agenda.

In addition, HSBC Amanah Malaysia Berhad (HSBC Amanah) had launched the world’s first United Nations (UN) Sustainable Development Goals (SDG) sukuk. This reflected HSBC Amanah’s commitment to financing projects that benefit communities and the environment in line with HSBC Group’s responsibility to help finance global sustainable development.

Values are the most important driver for investors and issuers in Asia to care about environmental and social issues. Fifty-eight per cent of Asian issuers say they care because it aligns with their values as an organisation, and 62 percent of investors because it is right to care about the world and society.

The survey also suggests Asia is ahead in being more attuned to the commercial benefits of ESG investing and financing. Fifty-eight per cent of Asian investors care about environmental and social issues because doing so can improve returns or reduce risk, compared to 54 percent globally. While 47 percent of issuers say prioritising ESG can improve returns, more than issuers in any other region surveyed.

Asian investors report fewer obstacles to ESG investing than counterparts in other regions, although 22 percent complain of a shortage of ESG investment opportunities, while 18 percent say there is a lack of ESG disclosure by issuers.

Some 24 percent of Asian issuers make no ESG disclosures, twice the share of any region, while under 20 percent of investors disclose the ESG characteristics of portfolios, against around 25 percent globally.

The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) are an example of a common standard that issuers and investors could align with to improve ESG disclosure. Only around 40% of issuers who responded to the survey currently follow the TCFD recommendations.

Jonathan Drew, head of sustainable finance for Asia-Pacific at HSBC, said:

“Environmental and social factors are becoming priorities for both issuers and investors in Asia, and there is increasing recognition that these factors are drivers of yield and value.

“This survey shows some really encouraging progress and momentum, but we must not kid ourselves that the transformation of Asia’s financial markets necessary to meet the climate challenge is complete.

“We must now ramp up efforts in all areas from capturing the hearts and minds by raising awareness and engagement through to the technical disciplines of risk analysis and disclosure.”

HSBC has delivered a range of sustainable finance transactions in Asia-Pacific in 2019. Landmark deals include ICBC’s USD3.15 billion Greater Bay Area green bond, the first green loan compliant with the Green Investment Principles for Belt and Road by ICBC, Hong Kong’s inaugural sovereign USD1 billion green bond, the first green loan in Singapore for Ho Bee Land, Macquarie University’s first sustainable bond from a university, the world’s first green convertible bond from a real estate company, Link REIT, and the first UN Sustainable Development Goals (SDG) sukuk for HSBC Amanah Malaysia.


Please enter your comment!
Please enter your name here

Latest News

Bank Muamalat Approved 83% SME Payment Assistance Applications

With Covid-19 surge currently being experienced by the country seeing no sign of abating, many SME's who were already struggling during MCO...

Weekend Golf Getaway in Horizon Hills and Ponderosa

With Covid-19 looming, overseas travel is far and beyond anyone's wishes at the moment, but for frequent travelers keeping oneself locked up...

Coach Inspired By NYC Skyline

This holiday, Coach is updating its seasonal collection with the joyful release of its Coach 2020 Holiday Collection – the designs are...

Maxis Makes Top Management Changes After CTIO Departs

Maxis is seeing major changes in its top management, starting with the departure of its Chief Technology and Information Officer (CTIO), Morten...

Preparing for post-pandemic opportunities

Businesses in Malaysia must begin planning and preparing now to be able to leverage the opportunities that come with the eventual post-pandemic...

Must read

4 reasons why customer experience is the key to success

Vincent Tang, Regional Vice President, Asia, Epicor "Customer service" and "customer experience" are often used interchangeably. But there's a...

Deloitte report finds Malaysia among regional leaders in digital life adoption

An extensive survey conducted by Deloitte across age groups in eight countries in South and Southeast Asia showed that consumers aged between...

Malaysia needs to brand its startup ecosystem as one of world’s best, says KJ

Khairy Jamaluddin, Minister of Science, Technology and Innovation, said the country’s entrepreneurship ecosystem was on par with the world’s best, but Malaysia...

How today’s technology is key to industrial and manufacturing sector business continuity in a post-Covid-19 world

By  Dr. Ravi Gopinath, Chief Product Officer AVEVA , How the world does business was changing before the outbreak...