18/08/21

ASIA: Attitudes towards sustainable investing are changing, family office leaders say.

As published on scmp.com, Wednesday 18 August, 2021.

Asia is lagging behind when it comes to sustainable investing, but attitudes are changing, particularly as a new generation of leaders seeks to make an impact through its investing choices, according to family office investors.

Speaking at the Post’s Asia Sustainability Conference, Yuni Choi, director of investments at Hong Kong family office RS Group Asia, said Europe has been a pioneer in the space in terms of the percentage of assets under management dedicated to sustainable investment, as well as products dedicated to environmental, social and governance (ESG) and impact investing.

“I’m optimistic that the momentum in Asia is very very strong in terms of both public investors, like pension funds and governments, as well as private investments,” Choi said. “Even though it has been slower in terms of development in Asia, I see a great momentum in family offices, so I feel more optimistic.”

RS Group, founded by Annie Chen, helped incubate the Sustainable Finance Initiative, a community platform designed to encourage sustainable finance in Hong Kong. The platform now has about 17 family offices learning about sustainable finance and deploying capital actively in the space, Choi said.

The process of achieving a 100 per cent sustainable portfolio is much easier now than it was a decade ago, Choi said.

“It is possible to build a 100 per cent sustainably invested portfolio and meet the financial needs or returns,” she said. “If you’re not in the space, it’s not too late. There are a lot of attractive products out there and a lot of knowledge and advisers in the space.”

Asia remains a “little behind” on existing investments, in part because of economic, technology and compliance issues, according to Shiraz Poonevala, director of investments at GP Group, a Thailand-based family office.

However, that is changing as environmental and other issues move to the forefront for the public, regulators and the financial industry, Poonevala said.

“Going forward, we are all equal. There is so much pressure to look at sustainable investments that, with new investments, we are on par with the rest of the world,” Poonevala said. “The existing investments … to correct what we are doing will take a little longer.”

GP Group’s portfolio of companies includes a number of legacy investments, such as mining and coal, where change is slower or harder.

“From a shareholder perspective, we’ve been working with our investment companies,” Poonevala said. “ESG has been very important to us. It has been a key agenda item for every meeting. At our operating companies, we go through ESG operating requirements every quarter. It has a lot to do with management driving the change. From our perspective, we offer guidance and support for the changes they would like to make.”

Noor Quek, CEO and founder of Singapore strategic advisory firm NQ International, said diversity in family offices – both in terms of gender and age – was helping to increase the importance of sustainable investing, particularly as younger generations moved into leadership roles.

“You must walk the talk,” Quek said. “Diversity in these aspects is critical to make sure all that is being done is effective. It cannot just be women on boards, children [getting involved in the business], a couple of people talking. It’s the same with charities. Unless you get your fingernails dirty, writing a cheque is not the only answer.”