How can Asia’s wealthy families make sustainability part of investment, business and stewardship decisions?

For Asia’s wealthy families, sustainability increasingly affects how they allocate capital across investment portfolios and operating businesses, and what they pass on to future generations. Energy security and development needs complicate the region’s transition, requiring families to assess which companies can reduce emissions while remaining commercially viable and how their own business can remain competitive.

At Bank of Singapore’s inaugural Sustainability Summit on 22 October 2026, investment executives and family office representatives discussed integrating sustainability into investment research, capital allocation and business decisions rather than treating it as a separate investment category.

At the summit, the bank launched Sustainability Partners, an advisory team within its Chief Investment Office led by Christine Cheong, Head of Sustainability Partners. As part of its ultra-high-net-worth (UHNW) strategy, the  bank aims to link investment advice with business transitions and multi-generational stewardship for entrepreneurial families.

Jason Moo, Chief Executive Officer of Bank of Singapore, linked the approach to the responsibilities of managing family wealth across generations: “Success is rarely measured only by what we accumulate. It is also measured by what we build, what we enable and ultimately what we leave behind.”

Sustainability becomes part of family investment decisions

For families invested in Asia, excluding carbon-intensive companies could mean overlooking businesses central to the region’s energy transition. Coal’s share of Southeast Asia’s electricity generation rose from 37% in 2015 to 47% in 2024, while its share of the overall energy mix increased from 20% to 30%, according to the International Energy Agency’s (IEA) Southeast Asia Energy Outlook 2026. These dependencies raised the question of which companies could credibly reduce emissions while remaining commercially viable.

Regulators had begun recognising the need to finance such transitions. The Singapore-Asia Taxonomy, launched by the Monetary Authority of Singapore (MAS) in December 2023, established an “amber” category for transition activities across eight sectors, including the managed phase-out of coal-fired power plants. Jean Chia, Global Chief Investment Officer at Bank of Singapore, argued that exclusionary policies were not always appropriate in Southeast Asia, where investors also needed to assess companies’ capacity to undertake credible transitions. She said sustainability belonged in asset allocation, security selection and fundamental research, guided by three considerations: relevance, risk and responsibility.

Energy security illustrated why transition assessments required more than environmental classifications. Indonesia had 2,742 megawatts (MW) of installed geothermal capacity at the end of 2025, second only to the United States, according to ThinkGeoEnergy.

Thu Ha Chow, Country Head for Singapore and Head of Fixed Income Asia at Robeco, cited an Indonesian geothermal company to illustrate how reliable baseload generation and national energy requirements could influence investment assessments.

For wealthy families, these considerations also extended to the selection of investment managers. Chow said Robeco examined companies’ transition strategies, financial capacity and management, while monitoring performance and engaging with them. Assessing  investment managers’ understanding of the underlying technologies, financial risks and execution requirements provided a more substantive basis for investment decisions than sustainability labels alone.

Patient capital links family returns with long-term stewardship

Long-dated transition investments tested wealthy families’ ability to commit capital across generations while managing liquidity. According to the UBS Global Family Office Report 2025, private markets accounted for 21% of family office portfolios in 2024. Among respondents planning allocation changes, the intended share fell to 18% in 2025 amid slower exits and higher financing costs. Alternative assets accounted for 31% of portfolios among surveyed Southeast Asian family offices.

Tsao Family Office illustrated how a family could pursue long-term sustainability objectives through its investment strategy. Leslie Lim, Deputy Chief Investment Officer, said approximately 45% of its diversified portfolio was already highly impactful or strongly sustainable, with a target of more than 60%. Although impact was not formally part of its investment mandate, he said it was often the family’s first question.

Lim identified private markets as a source of opportunities in decarbonisation, renewable energy and nature-based solutions, where investments could take at least seven to ten years to mature. He described a community solar investment providing cheaper electricity to households unable to install their own panels. According to Lim, the investment was expected to return most of the capital by the third year, with a potential full exit around year seven at two to two-and-a-half times the invested capital. The 45% allocation reflected an existing portfolio decision, while the community solar returns remained projections. Its expected repayment schedule illustrated the need to balance long-term opportunities against liquidity requirements and execution risk.

Families could also allocate capital according to different financial and stewardship objectives. Lim said Tsao Family Office committed a small proportion of assets to innovative projects that might not return capital, providing early funding to help reduce risk for other investors. Chia also discussed how families could allocate catalytic or philanthropic capital alongside conventional investments, recognising that some initiatives might not generate financial returns.

Family-owned businesses weigh the cost of transition

For UHNW clients who owned businesses, transition decisions also involved capital expenditure, financing and competitiveness. BloombergNEF reported that average lithium-ion battery pack prices fell 8% in 2025 to $108 per kilowatt-hour, improving the commercial case for some  energy technologies.

Mike Ng, Group Chief Sustainability Officer at OCBC, said lower costs for solar, wind, electric vehicles and battery storage were encouraging adoption for economic reasons, rather than solely for environmental benefits. He said business owners still faced trade-offs between sustainability ambitions, technological readiness and profitability.

Lower technology costs did not eliminate financing and implementation risks. Family owners still needed to weigh expected savings against upfront investment and competing demands on capital, including portfolio investments and other long-term commitments.

Assessing transition progress also required adapting to changing expectations. In June 2026, OCBC launched OCBC PULSE, a free environmental, social and governance (ESG) assessment tool for smaller businesses that also enabled larger companies to assess their suppliers. For family-owned firms operating within corporate supply chains, sustainability performance could therefore affect their relationships with larger customers.

In August 2025, Singapore regulators made Scope 3 emissions reporting voluntary for listed companies outside the Straits Times Index. Ng questioned whether extensive disclosure always translated into emissions reductions. For family owners and investors, this distinction underscored the importance of evaluating operational progress rather than relying solely on mandatory reporting.

Labelled products struggle despite stronger returns

Sustainability-labelled funds continued to face uneven investor demand despite stronger performance. Morningstar reported net outflows of $84 billion from global sustainable funds in 2025. Morgan Stanley’s Institute for Sustainable Investing found that sustainable funds returned a median 4.9% in the first half of 2026, against 4.0% for traditional funds. Yet net inflows represented only 0.9% of prior year-end assets, compared with 2.5% for traditional funds.

The divergence was pronounced in Asia. Sustainable funds investing in Asia-Pacific returned 11.6%, against 4.8% for traditional funds, while Asia-domiciled sustainable funds recorded $7.5 billion in net outflows, equivalent to 5.5% of prior year-end assets. For wealthy families, the figures highlighted why fund performance and sustainability labels alone were insufficient to assess investment opportunities.

Singapore wealth managers had already developed frameworks to incorporate sustainability into investment assessment. DBS Private Bank introduced portfolio-weighted ESG ratings in 2021 to assess clients’ holdings, while United Overseas Bank assessed investment products against sustainability and performance criteria. Standard Chartered Private Bank’s ESG Select framework similarly applied asset-specific sustainability assessments. These approaches focused on portfolio construction and product selection, while Bank of Singapore’s Sustainability Partners proposition sought to extend advisory services to family-owned businesses and multi-generational stewardship.

What Sustainability Partners adds to existing advice

For wealthy families, assessing transition investments, financing changes to family-owned businesses and planning intergenerational stewardship involved decisions spanning investment and commercial banking. Bank of Singapore said its UHNW clients were often entrepreneurs seeking advice on sustainability-related investments, business transitions and the impact they intended to create across generations.

The bank already had relevant capabilities. Its Chief Investment Office had developed in-house ESG methodologies and fund selection processes, previously overseen by Christine Cheong, while it also offered philanthropy advisory services.

Sustainability Partners was therefore not an entirely new investment capability. According to the bank’s announcement, its purpose was to coordinate existing investment expertise with commercial banking and stewardship advice, working alongside relationship managers and specialists across OCBC Group. The proposition covered three pillars: investments, businesses and multi-generational stewardship. For entrepreneurial families, the intended approach was to address portfolio allocation alongside business transition requirements and longer-term family objectives.

Client outcomes remain the missing measure

If sustainability was becoming part of mainstream investment analysis, as the summit’s speakers argued, its effects would not necessarily be captured by labelled fund flows. They would be reflected instead in the decisions wealthy families made: how they allocated their portfolios, financed changes to their businesses and committed capital to objectives beyond financial returns.

For Bank of Singapore, the longer-term test would be whether integrated advice influenced allocations to transition investments, financing for client-owned businesses and intergenerational stewardship decisions. Tsao Family Office’s community solar investment illustrated the importance of measuring realised returns against projections, particularly for investments requiring patient capital. The effectiveness of Sustainability Partners would ultimately depend on whether its coordinated advisory approach translated into measurable financial and business outcomes for clients.