BNP Paribas AM: Putting sustainable investing at the core in Asia


Sustainable investment strategies are gaining ground in the Asia Pacific region as issues such as climate change and plastic waste come to the fore.
  • ESG investing is growing rapidly, both globally and in Asia
  • Sustainable investing enhances company and stock performance
  • Our robust ESG integration framework includes a strong stewardship approach

 

ESG investment strategies are growing rapidly globally

The growth in sustainable investing has begun to reshape the asset management landscape – between 2016 and 2018, global assets under management in sustainable investment strategies rose from USD 23 trillion to USD 31 trillion. Europe remains the largest market globally for sustainable investing with USD 14 trillion of assets in 2018. However, strong growth has been seen globally between 2016 and 2018, from the US (+38%) to Australia (+46%) to Canada (+42%).

In the Asia Pacific region, growth in Japan has been staggering – from USD 474 billion in sustainable assets in 2016 to today’s figure of nearly USD 2.2 trillion. The drivers fueling this 307% rise include:

  • Japan’s first Stewardship Code (February 2014), encouraging institutional investors to engage with the companies in which they invest
  • The Corporate Governance Code (June 2015), setting rules on whistleblowing, disclosure and stakeholders’ rights
  • The Government Pension Investment Fund (GPIF) becoming a PRI signatory in September 2015 and encouraging external asset managers to enhance investment stewardship and ESG integration

Across the region, numerous diverse stakeholders have energised the adoption of environmental, social and governance (ESG) investment strategies, including governments and regulators, companies, asset managers and data providers. However, the rapid growth has also contributed to a number of challenges for investors which BNP Paribas Asset Management outlined in The rise of sustainable investment in Asia Pacific – good stewardship is key.

Read more about the many factors to consider when seeking to pursue a sustainable investment strategy for Asia Pacific assets.