Giving Compass’ Take:
• Sanchita Talukdar illuminates one bright side effect of the pandemic, with ESG investments demonstrating strong, favorable growth.
• How do these investments benefit businesses and ecomonic recovery? What can you do to adjust your investing to support Environmental, Social, Government portfolios for coronavirus resilience?
This crisis has changed the way capital markets look at Environmental, Social, Governance (ESG) risks in investment portfolios and funds. It has proven that ESG factors have been critical for businesses to achieve financial resilience.
The United Nations has been encouraging their signatories to utilize ESG data to effectively cope against deleterious business outcomes amidst the crisis. In fact, the COVID-19 pandemic has given rise to an unexpected global “strengthening of convictions towards ESG portfolios” as they have been outperforming their traditional counterparts during this period of economic and social turmoil.
On 7 May 2019, the Hong Kong Monetary Authority (HKMA) initiated mandatory sustainable and green practices into all its future investment decision making to mobilize its HKD 4 trillion valued (in US $) Exchange fund. Inducted as a signatory member of the United Nations-supported Principles for Responsible Investment (PRI) in August 2019 , the HKMA is helping businesses transition and adopt ESG best practices in line with international sustainability measures. It is launching three initiatives which includes:
Hong Kong’s new regulatory actions are emblematic of the growing opportunity for impactful capital markets and investment strategies in Asia and ESG regulatory trends in Vietnam and Singapore. What the city state has rolled out is part of the growth of ESG encouragement measures in Asia that includes diverse financing strategies for regional economic development.
The pandemic has exposed core interdependencies and vulnerabilities within economic, social and natural systems. The resilience of ESG portfolios, however, can inspire global investors who have been sitting on the side lines of ESG investment to reconsider these opportunities. Spurred by regulatory advancements and enabling technology, Hong Kong may be the role model the world needs to effectively transition out of the crisis.
Read the full article about environmental, social, governance investments by Sanchita Talukdar at AVPN.
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