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Asian Issuers Show Global Leadership in Embrace of Sustainability Agenda

Asian issuers are assigning high levels of importance to environmental and social issues, putting them ahead of their global peers and investors in the region, according to HSBC’s Sustainable Finance and Investing Survey 2021.

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

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

However, there are certain issues holding back sustainable investing in Asia, the most common reason is environmental, social and governance (ESG) talent shortage. Over 40% 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 are some of the same issues encountered by investors elsewhere.

Such challenges may frustrate progression, but they do not prevent it. And Asian investors are continuing to embrace ESG investing, albeit at their own, slower pace.

Some 39% of them this year say their organisation has a firm-wide policy on responsible investing or ESG issues and a further 36% say they intend to have one in place in the future.

The good new is 72% 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 resource 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.”

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