In focus - Global Investor Study
Over half of Hong Kong investors want all funds to include sustainability factors
A majority of Hong Kong investors believe fund managers should be automatically investing sustainably.
A majority of Hong Kong investors believe fund managers should be automatically investing sustainably. Over half (56%) of Hong Kong investors said all investment funds should consider sustainability factors, not just those specifically designed as "sustainable investment funds". They also believe an “integrated” approach was the most important method when investing sustainably. These findings were part of Schroders Global Investor Study (GIS) 2019, which garnered the views of more than 25,000 investors around the world, including 500 investors based in Hong Kong.
Jessica Ground, Global Head of Stewardship at Schroders, said: “The results of this study should be heeded. The asset management industry looks after $74 trillion* on behalf of investors. It is therefore essential that fund managers listen to what those investors want and act on it – in every conversation with companies, every meeting and in every investment decision.”
Should all funds consider sustainability factors?
Whilst more than half of Hong Kong investors believe that all investment funds should consider sustainability factors and not just those specifically designed as "sustainable investment funds", it is relatively low in comparison to regional and global findings. Regionally, 66% of Asian investors were in favour of all investment funds considering sustainability factors while 61% of investors globally believe the same.
Hong Kong investors want the best of both worlds
To achieve their goals, Hong Kong investors said an “integrated” approach was the most important method (45%) when investing sustainably. The integrating approach invests in companies that are likely to be more profitable because they are proactive in preparing for environmental and social changes. Hong Kong investors want both the financial benefits as well as the social benefits when making sustainable investment decisions.
A “responsible” approach (that invests in companies because they are best-in-class when it comes to environmental or social issues or how the company is managed) (35%) was the next most important method followed by a “screened” approach (that avoids controversial companies – or “sin stocks”), which was least likely to be considered the most important (20%).
Similarly, Asian investors (47%) have the same philosophy, and believes the integrated approach is most important, while most global investors (40%) prefer the “responsible” approach.
Schroders’ Jessica Ground said it was important for the industry to note that most investors want a consideration of ESG factors (environmental, social and governance) from all funds.
“Clients are clear they don’t want investments that operate in a vacuum, the majority are looking for ESG integration as standard. They also want asset managers to hold companies to account, particularly on issues like climate change and water shortage. That is why we have set a target for all of our investors at Schroders to be systematically integrating and engaging on ESG by the end of next year,” she said.
Visit www.schroders.com.hk/gis to find out more about the Schroders Global Investor Study 2019.
* Source: Global value of assets under management was $74.3 trillion at the end of 2018 - Boston Consulting Group. Published July 2019.
In April 2019, Schroders commissioned Research Plus to conduct an independent online survey of 25,743 people around the globe. This research defines “investors” as those who will be investing at least €10,000 (or the equivalent) in the next 12 months and who have made changes to their investments within the last 10 years.
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