Best Private Bank — Asia Pacific HNW

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. 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 have been engaged in developing 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 superior sustainable investment solutions as actively managed sustainable investment funds or customised mandates across all asset classes. We believe that sustainability is a long-term force for change. That is why we integrate environmental, social and governance (ESG) factors across our investment solutions, actively engage with companies, and target better outcomes.

Our proprietary and innovative sustainable investment tools help reduce reputational risks and improve the ESG profile of portfolios. We are committed to the Paris Climate Accord and to reporting transparency regarding ESG factors, SDGs and climate change mitigation.

Benjamin Cavalli, head of Wealth Management Asia Pacific, Credit Suisse Growing public awareness of the economic impact of the climate crisis, biodiversity loss and the wide-scale disruption caused by COVID-19 has accelerated interest in sustainable investing worldwide.

Purpose-driven companies are not only focusing on the sustainability of their ESG and operational processes and policies, but are increasingly exploring the positive impact of their products on society, and the degree to which these products are directly helping achieve societal objectives. Investors are seeking exposure to those companies that are demonstrating this transition. They want to align their portfolios with impactful companies and seek investment returns from fast-growing themes aligned to the UN Sustainable Development Goals (SDG), such as education technology, financial inclusion, green technology, and healthcare.

We believe banks and financial institutions are important agents for change. We are committed to playing our part in achieving a more sustainable global economy by engaging with clients, bringing them with us on our journey, and innovating to create sustainable investing solutions that achieve clients’ preferences and goals, alongside our own.

To give investors more insights into investment trends, we hold an annual Supertrends conference, outlining multi-year societal trends aligned with the United Nations’ SDG to provide clients with a simple and transparent framework to prioritise their investments according to their purpose, be it climate action or in healthcare.

Our Sustainable Investment Framework focuses on how we apply ESG criteria and create transparency for clients. We aim to deliver solutions ranging from ESG strategies or exclusions and integration, through to thematic/ impact-aligned and impact investing — all seeking to ‘generate returns sustainably’ and focus on the market rate of return for the given opportunity. We believe that we can positively affect society and the environment, while generating market-rate or higher returns.

In addition, we have created a bespoke Sustainable Activities Framework that defines the methodology governing eligible activities that qualify as sustainable. Our goal is to deliver a robust and credible framework to define Green, Transition and Social financing, and to encourage clients to consider these factors when engaging with us.

Together with a robust and innovative sustainable product offering, we aim to integrate sustainability reporting into our standard investment reporting, increase transparency on clients’ portfolio sustainability profile, enabling clients to make better-informed investment decisions and helping them align their investments with their personal values.

Tee Fong Seng, CEO Asia-Pacific, Pictet Wealth Management Initial conversations on ESG started with institutional investors, and as such were much based on risk mitigation. With time, the conversation has become less about reducing risk and more about finding the right opportunities for investing in the future we would like to see. As such, private clients are becoming more interested in solutions to climate change, sustainable agriculture, responsible consumption and a circular economy.

All of our discretionary portfolio mandates (DPM) integrate ESG considerations and we are targeting 100% ESG integration by 2022 for DPM and Advisory. Toolkits we use include our proprietary ESG Scorecard to provide a focused view of ESG risks and opportunities for corporate issuers and our ESG Due Diligence Questionnaire to monitor ESG risks and opportunities for our investments in funds. We are planning to launch solutions focusing on positive impact, starting with climate action.

In addition, we are going above and beyond the product shelf, by understanding how ESG characteristics influence our economic forecasts. One of our main focus points for this year and this decade is to quantify and acknowledge the rapidly growing importance that climate change-related issues will have on economies and financial markets dynamics. We have conceptualised this as the “price of the future”. This concept forms one of the cornerstones of our forecasts as governments and central banks steadily integrate climaterelated issues into their policy making. This involves internalising a range of climate changerelated externalities into production processes and consumption. Michael Blake, Asia CEO, Union Bancaire Privée Sustainability really matters at UBP. We are increasingly integrating sustainability factors into our investment decisions to protect our clients’ wealth from new risks and to grow it by tapping into fresh market opportunities. This involves raising awareness of sustainability risk through enhanced client reporting, by adjusting our preferred investment universe and through a range of market-leading sustainable strategies, both liquid and alternative.

Specifically, we have developed a sustainable and impact fund offering, which includes investment opportunities in climate solutions. Our latest launch of a biodiversity restoration strategy should help embrace investments that contribute to the fight against climate change, as both biodiversity and climate are interlinked.

In addition, UBP Asset Management (Europe), our primary management company for UBP’s Luxembourg-domiciled funds, has signed up to the Net Zero Asset Managers Initiative. This means that we are committed to reducing the carbon emissions of our funds — which are distributed to private clients in Asia — and encourage investments in climate solutions to reach net zero emissions by 2050 or sooner.

Lok Yim, head of Deutsche Bank International Private Bank APAC The push for specificity and granularity vis-à-vis ESG impact is already becoming a key theme in the ESG market and there has been a significant rise in KPI-linked bonds, loans and derivatives.

Of the three components of a typical ESG decision, the focus may be moving from the first two (the economics of the deal, and the framework or taxonomy surrounding it) to the third – measuring and monitoring the impact. This impact is local but financial firms providing finance or managing it will have to aggregate it at a global level.

Vincent Chui, head of Wealth Management, Asia Pacific, Morgan Stanley PWM Asia Firstly, we must understand a client’s ESG goals. Once that is done, a combination of approaches ranging from restriction screening, ESG integration, thematic/impact focus and issuer engagement, should help clients build a robust ESG process.