Wednesday, 25 November 2020

Standard Chartered report shows COVID-19 has caused a shift in priorities of global investors

Standard Chartered Private Bank’s Sustainable Investing Review 2020 highlights the resilience of investor interest in sustainable investments amid market disruptions due to COVID-19.

The pandemic has led to a raised awareness of sustainable issues, from glimpsing a more sustainable and environmentally friendly world to a renewed interest in investing in companies that are resilient enough to weather short-term shocks and survive for the long term. As many as 90% of global investors surveyed said they are interested in sustainable investments, with 42% planning to invest 5% to 15% of their funds in sustainable investments over the next three years.  

The Private Bank’s third annual survey covered around 1,000 investors with a specific focus on affluent and high-net-worth (HNW) investors in Singapore, Hong Kong (HK), the United Arab Emirates (UAE) and the United Kingdom (UK). Each market contained three sub-groups of respondents: general investors with a minimum of $25,000 of investible wealth, affluent investors with a minimum of $1 million of investible wealth and HNW investors with a minimum of $5 million of investible wealth.

Investor interest varies across geographies

In Asia, interest in sustainable investing continues to grow, with around 43% of investors considering investing between 5% to 15% of their funds in sustainable investments. In general, investors in Singapore rated Clean Water and Sanitation and Life Below Water as being of higher importance, while Investors in Hong Kong rated Climate Action and Life Below Water as being of higher importance.

In the UAE, 72% of investors indicated they are highly interested in the possibilities presented by sustainable investing. Interest in investing or exploring sustainable investments is higher among the young and educated in the UAE. Around 71% of UK’s affluent and HNW investors were highly interested in sustainable investing and 45% will consider investing 15% to 25% of their funds in sustainable investments over the next three years.

Facilitating interests and removing barriers

Consistent with previous studies, the 2020 survey shows that investors lack knowledge about how to meet social and impact goals that are of interest to them. As high as 98% of affluent investors are interested in sustainable investing, but 93% are apprehensive about investing in this area. 

Banks, therefore, play a critical role in providing essential guidance to clients to unlock the growing momentum for sustainable investing. Besides the lack of knowledge and apprehension, the other top barriers to investment in this segment are lack of motivation and advice. 

Among the global respondents, affluent and HNW investors in Singapore ranked the highest in understanding what sustainable living, responsible investing and social investing means. They, however, fall behind the UAE and the UK when it comes to familiarity with impact investing and second to HK in environmental, social and governance investing, ethical investing, low carbon investing and socially responsible investing.  

Re-disseminated by The Asian Banker



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