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Word 2021 Sustainability is higher up the agenda for investors than ever, with last year’s United Nations COP26 event underscoring the scale of effort needed to achieve global net zero emissions by the middle of this century. How are you helping your clients to remove ESG risk from their portfolios and embrace sustainability in their investment strategy?
Tan Siew Meng, regional head, Asia Pacific, HSBC Global Private Banking At HSBC, we are committed to sustainable growth and invest to further enrich our broad suite of wealth products within the ESG universe, powering new solutions to the climate crisis and supporting the transition to a low-carbon future. There is a greater need to position portfolios for structural growth trends that relate to the sustainability revolution. Growing evidence has shown that incorporating strong Environmental, Social and Governance (ESG) considerations can improve portfolio resilience by mitigating risk. In other words, putting a sustainability lens to your investments does not necessarily mean sacrificing returns. In fact, companies that mitigate risks and capture ESG-related opportunities outperform over the long run. Our preferred way of incorporating ESG into investors’ portfolios is through a multi-asset approach, that actively manages risks and harvests new opportunities. Sustainable investing is about investing in progress, and recognising that companies solving the world’s greatest challenges can be best positioned to grow. It is about pioneering better ways of doing business, and creating the momentum to encourage more and more people to opt into this green future. Arnaud Tellier, CEO Asia Pacific, BNP Paribas WM What really stood out last year was the rise of SRI, globally and even in Asia. Extreme weather and events highlighting social justice issues both contributed to ESG rising to the top of the agenda for investors and policy makers. A record US$700 billion poured into ESG-focused funds worldwide and the MSCI World ESG Leaders Index rose more than 22% compared with the MSCI World’s 15%. COP26 was another watershed moment where despite the challenges and geopolitical constraints, the world committed to reducing coal usage, limiting deforestation and cutting methane emissions, among others. We know that this process will require vast amounts of financing, both public and private.
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We are convinced that this is the way forward and have been working towards it for several years: our know-how and our position as Europe's leading bank will be put to work for a more sustainable and inclusive economy. In line with our ambitions to be a world leader in sustainable finance, we are putting our expertise at the forefront of global transitions, for instance in energy and mobility. By joining the UN Environment's Net-Zero Banking Alliance last April, we committed to accelerating the pace of financing a carbonneutral economy by 2050. We h a v e b e e n e n g a g e d i n d e v e l o p i n g products, services, metrics and methodologies that have been enabling sustainable change for many years now, and we are developing proprietary tools to measure the impact. We were one of the first to put in place a robust and reliable sustainability rating methodology, called Clover Rating, which allows clients to identify the level of sustainability of their investments. In addition to ESG integration into our product selection framework, we have increased the breadth of our offering to enable clients to identify solutions that best match their investment interests. Our product offering builds upon our core sustainable investment strategies such as water scarcity, climate change, environmental impact and sustainable food manufacturing, to include more recent trends in renewable energy, electric vehicles and ecosystem restoration strategies. From a portfolio perspective, a core and satellite approach can be employed to “hedge” investors’ portfolios against climate change. However, the most comprehensive and effective approach is to employ ESG integration across mainstream investment portfolios. Climate change represents investment return and investment risk, and portfolios should be constructed accordingly.
Raymond Ang, global head, Affluent Clients, Standard Chartered Bank Governance and education are two key aspects in mitigating green washing. In early 2020, we launched ESG Select, our enhanced due diligence framework to curate ESG solutions. Funds on our platform today are curated from most of the industry’s leading ESG players. Last year, we launched our Sustainable Investments Classifications Framework to help clients easily identify what is in our sustainable investments universe, based on defined criteria and using third-party ESG data. The framework helps clients find products with lower ESG risks, giving them peace of mind. And to help clients better understand the solutions and make smarter decisions, we have introduced Sustainalytics ESG scores in our equity and fixed-income trade notes. To help client build diversified sustainable portfolios, we have been expanding our sustainable investing offering. For instance, we added sustainable structured products to our product suite (funds, equities, bonds) in 2021. Alongside the Bank’s Net Zero commitments, we declared net zero commitments to integrate ESG considerations in our Wealth Management advisory process and double our sustainable investing AUM by 2025. We aim to fully embed ESG when discovering client needs, portfolio construction, monitoring and portfolio review. We ensure our frontline staff are kept abreast of the latest sustainable trends and solutions through a series of training and workshops on sustainable investing. Andy Chai, Asia CEO, Bank J. Safra Sarasin We are a pioneer with more than 30 years of experience in sustainable investing. As a family-owned entity, sustainability is in our DNA. We have developed our own proprietary sustainability tools and have a large and experienced team that integrates sustainability into each step of the investment process. We can empower clients to achieve their financial and sustainability goals by providing
