Monday, 2 Aug 2021

Investors bank on green shoots

Beyond the pursuit of higher returns, a three-letter term is gaining momentum in the financial world: ESG.

Last year, global flows into funds investing in environmental, social and corporate governance (ESG) principles more than doubled from 2019, surging past US$150 billion (S$207 billion) in the fourth quarter, based on data from investment research company Morningstar.

Schroders portfolio manager Katherine Davidson says: “The Covid-19 crisis has increased the visibility and importance of sustainable business practices. Amid terrifying headlines and unprecedented disruption to our day-to-day lives, investors are rethinking their personal values and priorities.”

The latest Schroders Global Investor Study — an annual survey that polled more than 23,000 people from 32 locations around the world, including China, India and the United States — found that 77 per cent of retail investors refuse to compromise on their personal beliefs when investing.

Despite the buzz, there remains some confusion over ESG investing.

In a survey of 1,100 Singapore residents, digital wealth advisor Endowus found that ESG investing overwhelmingly resonates with respondents. Yet, only 28 per cent of respondents hold any ESG funds. Some 58 per cent of those polled cited a lack of understanding or knowledge of ESG investing.

 

 

 

Flows into ESG funds more than doubled globally from US$62b in Q4 2019 to over US$150b in Q4 2020.

 

 

How $1,000 can make a difference

Companies that align their operations with the health of the planet and society help to forge a more sustainable future. Here’s how much carbon emissions you could avoid annually by investing $1,000 in an Endowus ESG Portfolio.

Carbon emissions avoided* annually is equivalent to:

 

Beyond green growth

ESG criteria help investors find companies with values that match their own. Here’s what they take into account…

 

Effects of a company’s operations on environment, such as:

  • Greenhouse gas emissions

  • Waste and pollution

  • Resource depletion

A company’s ability to deal with social trends and labour and politics, including:

  • Working conditions

  • Employee relations and diversity

  • Ties with local communities

How a company is run, taking into account factors such as transparency, board diversity and corporate governance

 

By the numbers

Click here to learn more about ESG investing with Endowus.

Brought to you by Endowus, Natixis Investment Managers and Schroders

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