Developments and commentary in and around the ESG investment space.

Capital Group
Capital Group, overseeing more than $2.6 trillion, has joined the United Nations Global Compact initiative — a voluntary leadership platform for the development, implementation and disclosure of responsible business practices. 

The Compact is a call to companies globally to align their operations and strategies with 10 principles in the areas of human rights, labour, environment and anti-corruption, and to take action in support of the UN goals. These are embodied in its 17 Sustainable Development Goals (SDGs), which address many of the world’s most pressing needs and apply to all nations.

The firm has integrated ESG across all its investment strategies, it said in a statement. 

The Compact was launched in 2000. 

Cerulli Associates
ESG thematic fund launches are expected to continue trending, with nearly two-thirds (64 per cent) of managers in Asia surveyed by Cerulli Associates planning to launch such funds over the next two to three years.

China is seeing an increasing number of fund launches investing in new energy vehicles and renewable energy, while Hong Kong and Singapore have encouraged managers to launch more ESG and green funds, Cerulli said in a report. 

Along with an increasing number of product launches that focus on the environment, Hong Kong and Singapore have seen ESG-integrated products in equity, fixed income, and multi-asset. In Korea, the government announced a Green New Deal in July 2020 which will see it investing KRW42.7 trillion ($35.4 billion) in key green projects, including renewable energy and green mobility, over the next five years, it said.

Other factors, including regulatory and government initiatives, and — more importantly — solid performance of some ESG-focused funds, have played pivotal roles in retail interest, Cerulli said.

“The concept of ESG investing has evolved over the years, and what was once seen as a fad seems to have become more ingrained in the asset management industry and investors’ mindsets,” Leena Dagade, associate director, Asia with Cerulli, said. “Currently, the focus is on using ESG as a differentiating factor or to raise brand profiles, although it is likely that over the long term, more funds will incorporate ESG considerations. Managers need to adapt so as not be left behind, by boosting their ESG data systems, resource capabilities, and client education activities.”