Sustainable investing continues to gradually gain traction in the region with more than half of wealthy investors in Hong Kong and Singapore actively seeking related information, according to a recent survey by St. Jame’s Place Wealth Management Asia.

64 percent of Hong Kong and Singapore investors actively seek ESG-related information, according to the survey featured in a St. Jame’s Place Wealth Management Asia (SJP) study titled «Wealthy, Healthy Planet – The Power of Personal Wealth in Sustainable Development». 

63 percent of respondents said that ESG and sustainability are now important factors for selecting investments with 43 percent claiming they are prepared to actively divest from companies that do not operate sustainably.

The survey was conducted in February and March this year with around 2,000 affluent and high net worth investors across Hong Kong and Singapore. 

Segment Highlights

Unsurprisingly, ESG factors were considered more important amongst younger investors (25-34 years, 67 percent) compared to older investors (45 years or older, 60 percent).

Other segmental differences include specific ESG focus with Singaporeans ranking environmental issues as the most pressing (37 percent) compared with Hong Konger’s choice of social issues (41 percent). 

Barriers of Entry

Despite growing awareness, there continue to be barriers to entry in sustainable investing.

54 percent of respondents believed that they needed to compromise returns to invest responsibly with 42 percent expressing highlighting relative underperformance as a key barrier of entry.  

87 percent of respondents also demanded better financial advice and investment knowledge with both market naming independent financial advisors as their top source of advice (40 and 37 percent for Singapore and Hong Kong, respectively).

Coronavirus Boost

According to SJP Singapore CEO Gary Harvey the pandemic played a role to further accelerate awareness in sustainability.  

«COVID-19 has spotlighted many of the critical sustainability issues we face and motivated investors to play a role with how and where they invest,» Harvey said. «There is a tremendous opportunity for private wealth to play a growing role in driving forward sustainability agendas in Asia and globally.»

The British wealth manager has been a beneficiary of the growing adoption with its sustainable equity fund in Asia growing from S$1.2 million ($890,000) to S$38 million within two years. Globally, its sustainable funds have grown 10-fold from £270 million (US$371 million) in 2018 to £3.3 billion at the end of July this year.