Environmental, social and governance (ESG) investment is already big in Asia and will get bigger. But what will be the main factors driving it and how will Asian approaches to ESG differ from current practice elsewhere?
To answer these and other questions, our new CIO Special report brings together three experts: Bert Hofman, the director of the East Asian Institute at National University of Singapore (NUS) and Professor of Practice at the Lee Kuan Yew School; Anders Nordheim, who works for the WWF (World Wildlife Fund) as their senior vice president for Asia sustainable finance; and Deutsche Bank’s Kamran Khan.
As they discuss, Asia’s economic growth needs and the further internationalisation of many Asian enterprises will help drive environmental and governance improvements. Firms may use improved ESG credentials to ensure their positioning against international competitors, and meet increasing ESG compliance needs in global supply chains. There will be a growing emphasis on measuring, monitoring and reporting the actual impact of ESG transactions. Obvious sectors with ESG potential include energy development, food security and infrastructure. But health and other services, as well as transition and consumer finance, could also offer opportunities.
In the report, ‘Asia and ESG: experts explore’, Markus Müller, Global Head of the Chief Investment Office at Deutsche Bank International Private Bank, says that “Asia faces rather different challenges in implementing ESG than do Europe or the U.S. and the reasons for this can be historic or institutional. Individual Asian economies also have very different external links, both inside and outside of the region, and this may affect their ESG choices in future. But Asian ESG now needs primarily to be seen in a global context. And, over time, the increasing relative size of the Asian economies – and their technological dominance – may mean that Asian views on ESG will increasingly drive global ESG, not vice versa.”
To download a PDF of the full report, please click here.
