Asia’s sustainable investment gaps urgently need to be closed, says Edmund Koh, head of UBS Wealth Management Asia Pacific
Our entire planet faces sustainability challenges. In Asia, despite astonishing progress in the past half-century, problems of poverty, hunger and environmental degradation, and weaknesses in healthcare, schooling and infrastructure are still prominent.
Devising solutions to these problems presents a financial opportunity, and Asian people have shown a growing interest in sustainable investing—earning compelling returns through investments that are aligned with sustainable causes.
Our latest UBS Investor Watch survey of millionaires globally revealed that many Asian investors, particularly those in China, already have sustainable investments in their portfolios.
Even among investors who have not yet adopted this strategy, 85 per cent of Hong Kong and Singapore millionaires say they’re interested. That said, there are still barriers, as investors in the region worry that the practice is not established enough, and whether these investments can make a measurable impact.
To align investments with social and environmental impact, part of the journey towards making sustainable investing a mainstream practice, financial institutions in Asia and globally must firstly establish common standards and definitions to reduce confusion.
Secondly, providers should clearly showcase the level of financial returns that can be expected from sustainable investments, which should perform similarly if not better than traditional investments.
Thirdly, fund managers need to offer more sustainable products across asset classes. For instance, very few funds currently offer private investors exposure to products such as development bank bonds, which offer attractive yields, high credit ratings and an explicit focus on sustainable causes. Fourthly, wealth managers must engage investors and help them find investments that suit their risk appetites
and values.
Committed to leadership in sustainable investing, UBS has taken numerous steps that will help drive the entire financial industry towards a new sustainable standard.
The United Nations has set the world 17 Sustainable Development Goals (UNSDG) for the year 2030, the last of which involves revitalising partnerships for sustainable development. In the spirit of this UNSDG, it is time for Asia’s investors and institutions to work harder on profitable collaborations that will make the world a better place by 2030 and beyond.
Learn more about sustainable investment with UBS