ESG investing accelerates

Panellists in a roundtable say they expect the current exponential growth in assets under management to continue

Roundtable panellists:

  • Jean Chia, chief investment officer and head of portfolio management & research office, Bank of Singapore
  • Bertram Lai, group head, research and ESG, CGS-CIMB Securities
  • Helge Muenkel, chief sustainability officer at DBS Bank
  • Tan Jenn-Hui, global head of stewardship and sustainable investing, Fidelity International
  • Desmond Kuek, UBS head of sustainable finance Asia-Pacific and global head of sustainable finance group
  • Thio Boon Kiat, group chief executive officer, UOBAM
  • Moderator: Lilian Ang, The Business Times

BT: What key trends do you see dominating the sustainability agenda as investor interest in Environmental, Social, and Governance (ESG) themes gain momentum? 

Desmond Kuek:  Going forward, we expect energy security, food security, cybersecurity and climate security to dominate the sustainability agenda.

In our view, the fundamental factors fuelling the shift towards decarbonisation remain intact, and we recommend that investors continue to take a longer-term view on energy transition and sustainability more broadly.

We believe the road to net-zero car­bon will benefit areas like green tech, clean air and carbon reduction, as well as energy efficiency. Meanwhile, companies that outperform in energy cost management and climate resilience would be rewarded.

Here in Asia, we continue to see green tech investment opportunities in select China and Japan companies, particularly in renewable energy, transport, batteries, hydrogen, digitalisation, and energy efficiency.

Companies are increasingly investing in new technologies. This is exacerbated by the prospect of ongoing high prices for fossil-fuel-based energy, which further raises the economic attractiveness of green projects.

In the renewable energy space, solar and wind are expected to attract the most attention from governments across the region. In fact, Asia-Pacific (Apac) is likely to  be one of the biggest, if not the biggest, offshore wind market by 2030, with the top markets in China, South Korea, Japan, and Vietnam.

Already today, China is leading in the renewables production space and will accelerate its transition away from traditional fuels as the country aims to reach peak emissions before 2030 and net-zero emissions by 2060.

The other area would be food security (agricultural yield, food revolution). We expect production of key crops in Ukraine to fall as much as 40 per cent this year, keeping commodity prices higher into 2023 and pushing importers to diversify their sources of supply. Moreover, with curtailed access to fertilizer supply from Russia, we expect farmers to put a greater focus on solutions that maximise yield and lower input use, that is, in seed technology and machinery.

Source: The Business Times