Despite lagging behind its western counterparts, Asia Pacific is increasingly embracing sustainable investing with 80 percent believing that considerations for environmental, social and governance-related factors can boost returns.
A Franklin Templeton survey revealed growing acceptance and adoption of ESG investing, led by Australia and New Zealand where 94 percent hold the belief that ESG integration and increase gains. In the broader APAC region, 67 percent of respondents considered ESG an important component in their investment processes with 71 percent of assets owners seeking to expand expertise in the area.
By factor, Asia has placed particular emphasis on environmental and governance-related issues. 70 percent of APAC respondents considered environmental factors as their first and second highest priorities amongst the three with 67 percent specifically citing climate change. Governance-related considerations topped the rank at 71 percent due to lower disclosure and corporate governance standards in the region’s emerging markets.
Lacking APAC Data
The nascency of sustainable investing in Asia ex-Australia and New Zealand has naturally resulted in lower quality and quality of relevant data to support investment decisions. 41 percent of respondents in the Franklin Templeton survey quoted data access as a key challenge to introducing ESG policies.
«Concurrent with the growth in demand for responsible investing, the complexity of ESG issues now plays a pivotal role in the asset management industry, resulting in a wider range of options and more sophisticated products,» said Subash Pillai, APAC head of client investment solutions, Franklin Templeton multi-asset solutions. «Despite the limitations in data, definitions, and resources, investors are increasingly incorporating ESG-related approached in their portfolios.»
The report, titled the «NMG ESG Study», includes discussions with 237 key decision makers with assets under management that total around $20 trillion including $9 trillion in APAC.
