Sustainability steers investor demand

Around 60% of people across Asia Pacific want to invest or save their money more sustainably, but need more information to do so, according to a survey by Fidelity International.

There is a strong desire across Asia Pacific to make a positive change in the world, with three in five people saying Covid-19 has made them want to invest or save their money more sustainably.

At the same time, nearly two-thirds (63%) of individuals in the region agree it is important to act responsibly and sustainably as investors.

These were among the outcomes of research by Fidelity of the sentiment of close to 10,000 ordinary savers and investors across Mainland China, Hong Kong, Japan, Singapore and Taiwan.

However, access to tools and information were cited as barriers to seriously considering sustainable investing as part of financial planning.

“It’s clear that there is a gap between people’s desire to use their money for good and having enough knowledge and confidence to realise that desire through sustainable saving or investing,” said Jenn-Hui Tan, global head of stewardship and sustainable investing at Fidelity.

Turning awareness into action

Amid the positive sentiment towards sustainability among many respondents, ESG awareness clearly differs across markets, the survey showed.

Investors in mainland China seem most likely out of the five markets to have heard of ESG investing (65%) and be familiar with opportunities to invest in companies that promote ESG values (72%).

Despite the scattered awareness of ESG and sustainable investing overall, the study showed alignment in understanding of ESG investing – with respondents most commonly saying it is about “sustainable use of natural resources” (32%), “reducing waste or pollution” (28%) and “stopping climate change” (24%).

“These subjects are likely to become strong investment themes across Asia in the coming years,” Tan said. “We expect to see more ESG solutions being developed that address these needs, and in the long run, this in turn will help influence corporate behaviour.”

This is supported by the view of more than half (53%) of survey respondents who agreed that investing sustainably is the best option for investors to make a positive change in companies. Roughly one-third (35%), meanwhile, said corporate behaviour can be changed by moving investor money.

“It will take some time for the public across Asia to gain a better understanding of ESG,” added Flora Wang, director, sustainable investing and portfolio manager at Fidelity. “If we see intention line-up with action over time, that’s going to have a significant impact on the development of sustainable investing and corporate behaviour over the long term.”

Breaking down barriers

To achieve this, however, will depend on the industry addressing misconceptions and barriers to ESG investing that the survey identified.

For example, 33% of respondents in Asia Pacific agree it is impossible to invest sustainably and get a good return.

In addition, there are concerns among investors about the ESG intentions of many companies; 42% said there is no mechanism to hold management to account for sustainability promises.

Being able to find the right information about ESG investing is also a challenge – 46% of respondents saying they don’t have the tools or data to start investing sustainably, with 52% saying they have no idea where to get them.