Sustainable investing saw a decrease amongst asset owners worldwide in 2023, according to a FTSE Russell survey, including those based in the Asia Pacific region.
Amongst asset owners worldwide, 80 percent said they implemented or evaluated sustainable investments in their strategies in 2023, according to a FTSE Russell survey. This marks a decrease from 88 percent in 2022.
In line, APAC asset owners also recorded a lower rate of sustainable investing at 90 percent in 2023, compared to 97 percent in 2022. Fixed income was the top asset class for sustainable investment allocations in the region at 66 percent, compared to the global average of 45 percent. Infrastructure (44 percent) ranked second, followed by private real estate (43 percent).
In terms of sustainability issues – widely defined as those related to environmental, social and governance (ESG) factors – asset owners in Asia cited governance (53 percent) as the top one to consider. The selection of social themes plummeted from 76 percent to 43 percent, as did climate or carbon-related themes (72 percent to 34 percent).
Top Challenges
On adoption, 52 percent of respondents in the region cited their inability to align portfolios with sustainable investments as the top challenge. Half of asset owners did not trust data quality while 38 percent also highlighted differences in disclosure requirements in various jurisdictions as another challenge.
Nonetheless, certain industry efforts have improved the ease of implementing sustainability factors. They include consolidation of ESG reporting standards bodies (65 percent), development of sustainable finance and green taxonomies (58 percent) as well as investor disclosures around sustainable strategies and outcomes (45 percent).
The survey was based on interviews from March 27 to April 28 with 350 asset owners with between $7.9 trillion and $14.2 trillion in assets under management.
