Best Private Bank — Asia Pacific UHNW

Kwang Kam Shing, CEO of J.P. Morgan Private Bank Asia Combined with UNCOP26’s expanded effort to achieve net zero, we have seen growing interest from clients in the region for sustainable investing strategies, particularly during the COVID-19 pandemic. Clients want to invest in something that is going to have a positive outcome. In the past year, not only have we onboarded more sustainable investing strategies for clients to choose from, we have also expanded our overall service offerings via two acquisitions – OpenInvest and Campbell Global. OpenInvest is a fintech startup that uses data to help advisors and clients build customised portfolios based on specific values. Campbell Global is a leader in forest management and timberland investing and can help with carbon capture.

Last year we hired Dr. Sarah Kapnick, our very own Senior Climate Scientist and Sustainability Strategist, where she will support and advise on our sustainability and climate action efforts. Since joining, she introduced a framework of the three ‘R’s of climate investing — namely reduce, remove and retrofit. “Reduce” focuses on the reduction of fossil fuel energy demand. “Remove” refers to removing carbon from the atmosphere and the ocean — either through natural techniques such as tree planting or soil management. “Retrofit” refers to three main areas where infrastructure and technology both play a role: water, agriculture productivity, and the built environment. A lot of the innovation that is happening in this area exists in both early-stage companies in the private markets and in traditional public assets — all of which can be implemented comprehensively in client portfolios. Jean Chia, CIO and head of Portfolio Management and Research Office, Bank of Singapore. A recent spate of extreme weather events has highlighted the long-term vulnerabilities of many companies and indeed entire countries to climate risks. Post-COP26, strong political momentum around climate change will catalyse a powerful shift in policy and regulation worldwide to cut carbon emissions across all kinds of economic activity. Stricter regulations on the tracking and disclosure of carbon emissions and climate risk exposure, and more aggressive decarbonisation initiatives, including carbon taxes and emissions trading systems, can be expected in the coming years as the financial ecosystem evolves to meet higher environmental standards. Hence, identifying vulnerabilities to climate-related physical and transition risks will be critical for investors to manage risks within portfolios.

At Bank of Singapore, we call this approach R-E-A-P for short (which stands for a Researchdriven approach; ESG excellence; rigorous Assessment and P for process and performance). Our research team has produced a rich library of thought leadership pieces on the latest developments and key trends in ESG and sustainable investing, including rapidly emerging risks and opportunities for businesses from fast-evolving policy incentives, regulations and consumer preferences globally. These serve to guide clients on the most important trends in ESG that are gradually reshaping the investment landscape, including the accelerating shift towards decarbonisation of the world economy.

We have been deepening the integration of climate and broader ESG considerations into research recommendations and investment advice to help clients better evaluate both ESG risk and opportunities within their portfolios.

Besides providing MSCI ESG ratings and reports for securities under coverage, our research analysts have highlighted key exposures to material ESG risks and opportunities within their respective sectors. We have set internal targets to ensure that our investment ideas meet minimum environmental, social and governance criteria. To establish clear governance, Bank of Singapore set up a Sustainable Investment Committee last year to oversee its sustainable investment frameworks and policies. We offer an ever-expanding shelf of sustainability-themed products and investment solutions to clients based on ratings criteria, evaluation of climatealigned investment processes, ESG factors and thematic opportunities. Bank of Singapore has been the first in Asia to incorporate ESG factors in the assessment of the loan quantum for investment financing.

Jasmine Duan, investment strategist, RBC Wealth Management – Asia Data are crucial and we have been working with ESG data providers such as Sustainalitics and Impact Cubed and will work with more data providers this year. From a portfolio perspective, we can currently generate ESG and climate reporting of a portfolio compared to its benchmark. The ESG data allow us to measure Value at Risk from a climate perspective. Furthermore, we can conduct scenario analysis to understand how global warming can affect each company and analyse how much each company is contributing to the heating of the planet.

We believe that climate change creates opportunities and risk for portfolios, and our portfolio management team does all it can to capture the opportunities and mitigate risks early. Cai Xinfa, Ping An Group executive, special assistant to the Bank’s president and head of retail banking, Ping An Bank At present, both China and major overseas economies have proposed carbon neutrality plans. For clients, we differentiate between domestic and overseas investments in the way we eliminate ESG risks.

For overseas investment, some outstanding asset management institutions already consider ESG risks in their investment portfolios. We have cooperation with those institutions in terms of overseas investment to help clients achieve this goal in their overseas investment

Domestically, ESG is yet to become a factor/ consideration for asset management institutions in investment. The reason is that China only in 2021 proposed its plan of carbon peaking by 2030 and carbon neutrality by 2060. China’s carbon peaking is about 20-25 years later than that of Europe, the US and Japan, and its carbon neutrality goal is 10 years later than those countries. The plan is more at the macro/policy level now. Regarding ESG consideration, China is still in its infancy compared to the US, Europe and Japan, resulting in a lack of accurate instruments.

Therefore, we mainly help clients achieve this goal by allocating stock products related to new energy, digital economy, environmental protection, or other similar products that match this goal.

Alok Saigal, head, Private Wealth, Edelweiss Wealth Management India, ESG investing is yet to gain traction. Investors would like to be high on ESG through the incidental way and not at the cost of their existing strategy.

On the other hand, many investee companies are making a meaningful effort to increase their ESG score and move towards sustainable growth. With themes such as renewable energy and electric mobility taking up more attention, investors are keen on increasing exposure to such themes that enlarge their ESG footprint. Amy Lo, co-head of Wealth Management Asia Pacific, head and CEO of UBS Hong Kong, and a Group managing director at UBS Since the pandemic, there has been a transformational growth in clients’ mindset shift, asking advice on how we can help them achieve sustainable growth. When we meet with new institutional clients, it’s more often now than before that they want to know about our ESG approach. We believe sustainable investments (SI) could shift the risk profile of clients’ investments and assets, but more importantly, we truly believe that finance has a catalytic role to play to help solve some of the biggest challenges in the world.

In a privileged position to lead and shape clients’ long-term investment strategies, we made SI the preferred solution for private clients globally in 2020, meaning when clients come to us we recommend SI over traditional solutions. We have also built a multi-billion 100% SI discretionary portfolio in APAC, with a strong growth in AuM since launch, indicating a rapid growth of appetite in APAC.

In addition, we have been supporting companies in the region in their climate strategies by issuing green and sustainable bonds worth more than US$23 billion in 2021, including Asia’s first ever sustainability-linked bond. We focus strongly on the engagement of portfolio managers with the companies they invest in, to actively influence the glide path towards a low-carbon economy, and to improve their performance on other S and G issues and opportunities. Omar Shokur, CEO Asia, Branch Manager Singapore, Indosuez Wealth Management At Indosuez, we were early adopters of the ESG theme: it has been one of the top priorities when we interact with clients. We have designed a clear and comprehensive range of solutions, taking into account ESG criteria in the services proposed, its processes for developing and selecting financial products (e.g. directly-held securities, investment funds, structured products, private equity) and its credit policy.

We are convinced the 2020-2030 decade is critical and that it is the duty of financial industry players to propose solutions and encourage clients to support a more sustainable development and a more responsible economy. Indosuez is stepping up its initiatives in this area. We have adjusted our offerings to promote more sustainable growth and a more responsible economy through a wide range of ESG products in financing and asset management. We have pooled our strengths to act in line with our raison d'être and encourage clients to share our convictions.

Over the coming years, ESG will surely play a bigger role in the investment world as already evidenced by the vast increase in flows seen over the past year. As a bank, ESG plays an essential part in our client portfolio construction and we have a strong conviction that investors need exposure whether through equities, bonds or other investment solutions.