StanChart Survey Says More Investors in Singapore Interested in Sustainable Investments

Published on: 28 September 2022
by KnowESG

More Singapore investors are showing interest in sustainable investments. However, to improve the uptake of such investments, key barriers to sustainable investing must be addressed and overcome.

According to the most recent Standard Chartered Bank survey, 37% of respondents expect to have more than 15% of sustainable assets in their investment portfolio within the next two to three years, up from 24% now.

However, the banking group said in a statement that low adoption rates indicate an unrealised opportunity for more people to put their investment dollars toward sustainable investments.

According to its Sustainable Banking Report 2022, Singapore has potential retail investor capital of US$91 billion (S$130.7 billion) that could be directed toward top environmental, social, and corporate governance (ESG) goals, including climate transition financing.

More than 3,000 emerging affluent, affluent, and high net worth investors participated in the survey, which was conducted in ten important growth markets: Hong Kong, India, Kenya, mainland China, Malaysia, Nigeria, Singapore, South Korea, Taiwan, and the United Arab Emirates.

The report identifies the potential for retail capital mobilisation in these areas, highlights investor barriers, and suggests solutions to make sustainable investing a mainstream asset class.

Climate change and carbon emissions are the top ESG priorities for Singapore investors (46%), followed by food and water scarcity (31%) and pollution and waste management (24 per cent).

"Unlike conventional banking products, sustainable banking products can combine cost benefits with social responsibility or environmental sustainability. Interest in sustainable ESG funds has gone up - the bank has seen a four-fold increase in assets under management (AUM) since the beginning of last year," said StanChart.

The top barriers for Singapore investors are perceived low returns or higher risk (49%), comparability (48%), indicating that it is difficult to compare sustainable investment opportunities within the same asset class, and comprehensibility (47%), referring to concerns about too little information to help them understand and assess the impact of sustainable investments on ESG issues.

Mr Eugene Puar, regional head of wealth management for Asean and South Asia and head of wealth management (Singapore) at StanChart, believes that sustainable investment must be made more relevant to increase interest and adoption.

"By addressing investors' concerns with professional advice and education, we remove barriers so investors can make more informed choices that will achieve both financial returns and purpose. Ultimately, investors must feel empowered to be catalysts of change and mobilise their wealth to address one of the greatest challenges of this generation," said Mr. Puar.

Source: The Straits Times

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