BUSINESS Asia to see rapid growth in sustainable investment: UBS

BUSINESS

Asia to see rapid growth in sustainable investment: UBS

Xinhua

02:18, September 29, 2019

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(Photo: China Daily)

NEW YORK, Sept. 28 (Xinhua) -- Asia is expected to witness fast growth in sustainable investment thanks to the radical change of investors' and governmental attitude in the last few years, according to a research note issued by Swiss investment bank UBS Group AG on Friday.

Governmental policies address the threat to growth from risks including climate change, transition to a low-carbon world and inadequate infrastructure, said UBS.

The number of signatories to United Nations Principles for Responsible Investment (PRI) increased by almost 30 percent in 2018, the fast growth rate across the globe.

Being a signatory to PRI represents an important first step to engage with sustainable investment as PRI requires a responsible investment policy to cover half of assets under management within two years, according to UBS.

Now, Asian signatories of PRI have $5 trillion of overall assets under management.

UBS also predicts that massive infrastructure investment in Asia would contribute to the expansion of green financing and green bond market.

Chinese green bond market has ballooned in just three years to become the world's second largest, noted UBS.

Asian annual issuance of green bonds could soon triple to $150 billion driven by extensive infrastructure funding demand in the area, UBS said.

Asian stock exchanges in China's Hong Kong, India, Malaysia, Thailand, Singapore and Vietnam have introduced mandatory reporting standards on environmental, social and governance (ESG) issues.

Growing acceptance that sustainable investments do not compromise financial performance is creating awareness that investments can also address sustainability concerns, said UBS.

Statistics show that MSCI EM ESG Leaders Index, a benchmark for sustainable investment, has outperformed the MSCI EM benchmark with averaged excess return of 3.2 percent each year in the last ten years.


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