Asia sustainable investments could jump from $20bn to $4 trillion by 2015: Vontobel report

Sustainable investments in Asia (ex Japan) could make a huge jump from approximately $20bn today to $4 trillion by 2015 according to research by Vontobel, the Swiss fund manager. Vontobel says it believes sustainability themes are being ‘seriously undervalued’ in a region undergoing a tremendous pace of change in environmental, social and governance (ESG) standards. The Vontobel study, titled “Sustainable investing in Asia – uncovering opportunities and risks”, says Asia is faced with massive environmental problems and social challenges. However, it says governments are taking decisive action in countering them, leading to significant investment opportunities. These, it says, include significant investment in sustainable infrastructure and increasing regulation to counter pollution. In addition, the report says that companies in Asia are increasingly publishing related sustainability data. It also notes a growing appetite for investment in social themes in the region. Falko Paetzold, author of the sustainability study, said: “In this context, the difference between progressivecompanies with comprehensive sustainability initiatives and those companies whose actions are of a more defensive nature is much greater than in Europe. Contrary to the assumption amongst many investors, we are seeing a rapid improvement in the situation regarding information on these topics.”
Significantly, the report suggests that investors might be holding back from investments in Asia precisely because of uncertainty around ESG issues, which once improved would open the way to much larger strategic allocations to the region.
Vontobel says the current $20bn in sustainable investments in Asia represents just 0.4% of global sustainable assets under management. An increase to the current global average share of sustainable investments, it says, would mean assets rising to $1.5 trillion. It says its predictions of corresponding growth in sustainable investment could take that figure to the 4 trillion mark by 2015.
Link to report