Asian Wealth Management Forum 2019 SG - Exclusive Insights - Valentin Laiseca

Valentin Laiseca of MSCI

May 29, 2019

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1. What’s the growing relevance of ESG in Asian Wealth Management?

Video transcript

1. What’s the growing relevance of ESG in Asian Wealth Management?

We see that institutional investors in Asia have embraced ESG in a very dramatic way. We've seen that from large asset owners, we've see that from pension funds, sovereign wealth funds, and large asset managers. We think that wealth managers are lagging behind. However, I don't think that's going to be the case for much longer, since there's a massive transfer of wealth going from baby boomers to millennials. We know that millennials tend to care a lot more about ESG considerations. They do care a lot more about sustainability. They do care a lot more about environmental issues, social issues, and so on. As a consequence, we see that demand from millennials that are being served by wealth managers in Asia will increase the demand for ESG products. We can help wealth management firms in various ways. We can provide the data that can be embedded in digital platforms for those millennials who want to create their own portfolios themselves, or create their own self screens. That could be things like not wanting to have companies that are producing tobacco in a portfolio. Or companies that are involved in any shape or form with the production of nuclear, or energy, or controversial weapons, or gambling, or tobacco. The list goes on. The other use case that we can identify is that discretionary portfolio managers and the manufacturers of investments, can use our ratings to integrate them into their own investment process, and as a consequence, we believe, and now there's more and more research backing this view, that those portfolios will have better risk adjusted returns and will offer better long term performance, as well as reduce risks.

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