Asian asset managers are significantly behind their European counterparts when it comes to addressing climate change and other environmental concerns within portfolios, according to a report by the WWF.
Asian asset managers fulfill just 43 percent of WWF’s criteria for sustainable investments which cover six areas: purpose, policies, processes, people, products and portfolio.
This compares to European asset managers who fulfilled 72 percent. And of those headquartered in Asia, Japan was the leader in responsible investment practices.
The «RESPOND 2021» report is aligned with the framework built by the Task Force on Climate-related Financial Disclosures (TCFD).
Asian Lag
WWF highlighted a number of shortcomings observed from surveying the eight Asia-headquartered asset managers.
For example, neither of the two Chinese asset managers surveyed disclose information regarding their engagements with the firms they invest in over ESG (environmental, social and governance) issues. Only half of the regional subgroup disclosed their roles in collaborative engagement initiatives with all being Japanese houses.
Just two Asian asset managers disclose their full proxy voting records and only one reported support for ESG resolutions.
Science-Based Criteria
According to WWF’s senior vice president of Asia sustainable finance Dr. Keith Lee, a more scientific approach needs to be adopted in the region not only for investors but also for the corporate sector.
«COVID-19 is a manifestation of the risks associated with the destruction of natural capital, which is vital to our collective social and economic wellbeing,» Lee said. «As we know, nature loss is intrinsically intertwined with climate change and asset managers will need to address both challenges by adopting robust, science-based criteria in their investments and expectations of Asia’s corporate sector.»
The report surveyed 30 asset managers in total, including 22 European firms, with a total of $16 trillion in assets under management.
