Standard Chartered Singapore sees seven-fold increase in sustainable investments
New survey suggests that sustainable investing is at a tipping point, but apprehension amongst Singapore investors over lack of measurement and transparency remains.
Standard Chartered’s latest Sustainable Investing Review 2021 revealed that sustainable investing is at a tipping point, driven in part by a rising societal responsibility to do good with wealth while making financial returns. However, investor apprehensions over lack of measurement and transparency remain the key concerns amongst Singapore investors.
The fourth annual Sustainable Investing Review surveyed more than 2,000 emerging affluent, affluent and high net worth investors in Mainland China, Hong Kong, Taiwan, Singapore, India, the UAE and UK. Overall, the allocation of sustainable investments in investor portfolios is on the rise with 13 per cent of investors already channelling more than 25 per cent of total investments into sustainable solutions, compared with just 2 per cent of investors in 2020.
The research identified some key Singapore trends across a four-stage adoption cycle: awareness and interest in sustainable investing remain strong, with a marked year-on-year (YOY) increase of 10 per cent in adoption.
Sixty-nine per cent of Singapore’s wealthy feel that they have a responsibility to make the world a better place and 76 per cent believe that it is possible to do good and make money at the same time.
However, 53 per cent of Singapore investors have also shared a number of apprehensions that are holding them back from putting their money into action, with lack of transparency and impact emerging as the top concern:
- Transparency of the impact of sustainable investing: 61 per cent of investors in Singapore feels that social impact is hard to measure (higher than the global average of 52 per cent)
- Financial performance: 56 per cent of Singapore’s investors have concerns about the financial performance of sustainable investments (higher than the global average of 47 per cent)
- The direct donation alternative: 45 per cent believe donations can achieve a more immediate social outcome.
The increase in adoption reflected in the survey is in line with what the Bank in Singapore has experienced with the take up of Environmental, Social and Governance (ESG) funds, showing a heightened resolve among clients to direct investment dollars towards sustainability. Environmental and social goals such as clean water and sanitation ranked most important among investors, followed by climate action.
Eugene Puar, Regional Head of Wealth Management, ASEAN and South Asia and Head of Wealth Management, Singapore, Standard Chartered Bank said: “Over the last year, we have witnessed a seven-fold asset growth in ESG funds offered on our platform. We foresee that sustainable investing will move from the periphery of global investment activity to the mainstream. Banks can play a big role in closing the gap between an investor’s intentions and their adoption of sustainable investing. Professional advice and education are crucial; by providing clients with that and access to the most relevant sustainable investment solutions, clients will be empowered to make informed choices which leave a positive impact and deliver financial returns.”
Read the report here.