Climate change: sustainable investments on the rise as investors tie environmental concerns with financial returns
- BlackRock says sustainable investing combines traditional approaches with ESG insights to reduce risks and boost long-term returns
- Investors are increasingly looking to ensure their investments make an impact on society and sustainability, BNP Paribas says
This article was part of a special supplement on private banking which was published in the South China Morning Post print edition on October 20, 2021.
Sustainable investing has been gaining popularity over the past decade as investors become are increasingly concerned about environmental and social impacts of their investments as well as the financial returns.
While the Covid-19 pandemic over the past one and half years has caused an unprecedented disruption to the global economy, it has also highlighted the importance and opportunities of sustainable investing, especially in the emerging markets.
According to BlackRock, a global investment manager, sustainable investing is the combination of traditional investment approaches with environmental, social and governance (ESG) insights to reduce risk and enhance long-term returns.
The firm said the growth of the sustainable investing market in recent years has been driven by several factors: financial decision-makers are asking more of companies and are seeking more sustainable investment solutions; regulators and governments are expanding their focus on incorporating sustainability into investment information and decision making; and the growing recognition that ESG research and analysis can potentially identify investment risks and generate excess returns.
In Asia, there is a growing appetite for sustainable investing, said BNP Paribas Wealth Management Asia. The company said traditionally, investors look to engage in responsible investing through screening investment options with a set of ESG factors.
