Asian issuers show global leadership to embrace sustainability agenda

96 per cent of Asian issuers say they have increased their focus and attention on environmental and social issues in the past year

Some 58 per cent of Asian issuers say that these issues are very important to their organisation, which is significantly higher than the global average of 44 per cent, the highest percentage among issuers of any region and a slight increase (56 per cent) in those who said the same last year. By comparison, 32 per cent of Asian investors said these issues are very important to them.

What is more, almost all Asian issuers (96 per cent) say they have increased their focus and attention on environmental issues, social issues or both in the past 12 months, with 60 per cent of them – a regional high – focusing on environmental issues specifically. For their part, some 72 per cent of Asian investors have also showed increased attention to these issues since last year, indicating the strength of the momentum supporting sustainable economic change in the region.

However, there are certain issues holding back sustainable investing in Asia, the most common being environmental, social and governance (ESG) talent shortage. Over 40 per cent of institutional investors in Asia say they are being held back from more ESG-based investing due to a shortage of expertise or qualified staff.

Other issues holding Asian investors back include a lack of attractive investment opportunities, a lack of comparability of ESG data across issuers, and regulatory or legal constraints. These issues are also encountered by investors elsewhere.

Such challenges may frustrate progress, but they do not prevent it and Asian investors are continuing to embrace ESG investing, albeit at their own, slower pace. Some 39 per cent of them this year say their organisation has a firm-wide policy on responsible investing or ESG issues and a further 36 per cent say they intend to have one in place in the future.

The good new is 72 per cent of respondents in Asia say they are paying greater attention to ESG issues compared to last year, indicating greater prioritisation among investors in the region.

Jonathan Drew, head of ESG solutions at HSBC, said: “Let’s get behind the efforts of governments, regulators, and industry associations across the region to build talent and create robust green jobs for the future. Sustainable finance and investment is a huge untapped opportunity for Asian corporates and investors, to differentiate themselves and drive growth. It is also critical in ensuring the region – which is among the most vulnerable to the climate crisis – transitions to a path of sustainable, low carbon, economic growth. A robust ecosystem of principles, frameworks and standards, across definitions and disclosure, requires expertise and dedicated human resources for it to happen. Meeting this need requires focus and investment, but doing so should pay huge dividends both in terms of building a sustainable future, and in terms of improving the bottom line.”