Broader adoption of environmental, social and
governance (ESG) investing is now accelerating in Asia. In particular, we’re
seeing a greater push by leading institutions or governments in embracing ESG.
After Japan’s Government Pension Investment Fund (GPIF) signed the UN-backed Principles for Responsible Investment (PRI) in 2015, sustainable assets grew rapidly to $474 billion in 2016 – up 6,670% from $7 billion in 2014. [1] Over the
last year, we have seen sustainable investment move to the forefront in Asia,
with an ever-increasing number of events, conferences, media articles and
conversations with our clients focusing on ESG.
In China, the government has been promoting
environmental investments by, for example, driving forward issuance of green
bonds – a market in which China has now become the second largest issuer in the
world, with $31.29 billion issuance and representing 18.7% of the global
issuance in 2018. [2] In Hong Kong, there are now 25 signatories to the PRI, 11 of which joined since
2017. In Malaysia, KWAP, the country’s largest public services pension fund, signed
the PRI in February 2018, confirming its increasing focus on promoting better
ESG practices.
But there’s still much work to be done. Although
interest in investing sustainably has been growing rapidly in the region, ESG
in Asia compared to other regions is still in its infancy. According to the
Global Sustainable Investment Review (GSIR) 2016, while worldwide sustainable
assets stood at $23 trillion, in Asia ex-Japan, the total figure was only $52 billion, a tiny fraction of the global total.
Of Asia’s total professionally-managed funds, less than 1% are sustainable
assets.
Investing responsibly for future generations
The global economic crisis of 2008 has led to a radical rethink of the role finance plays in our society. It has underlined the necessity for financial industry stakeholders to align themselves with the long-term interests of our economy.Climate change, ageing populations and social inequalities pose new risks that are complex to grasp, and which could destroy value for investors both in the medium- and long-term. It is our duty to take into account these risks: for our clients, of course, but also for our staff, our shareholders, our suppliers and our partners – as well as for society as a whole and for future generations.
After Japan’s GPIF signed the UN-backed Principles for Responsible Investment in 2015, sustainable assets reached $474 billion in 2016 – up 6,670% since 2014
It is also our role to share our expertise and
skills with our peers and with those institutional investors around the world
that are committed to focusing public policy on the creation of a global
economy that is more respectful of the environment.
Lastly, like every company, we seek performance and
growth. But there is increasing recognition of the need to nurture
broader-based growth with wider benefits to society at large.
Our vision
is clear: to contribute to a better future through our responsible investment
policy.
[1] 2016 Global Sustainable Investment
Review
[2] Climate Bonds Initiative
Opinions expressed herein reflect
the judgment of BNP Paribas as of the date of this article and may be
subject to change. This article is not intended to be a
solicitation or recommendation for a purchase, sale or any other transaction in
respect of securities, foreign exchange or other financial instrument. The article has been prepared for information purposes only to serve as a reference for
your investment decisions. You must use your own judgment to make any final
decision on investment.
