Altruism Meets Value
Sustainable investing – the investment approach of ’doing well by doing good’ – is gaining ground in Asia, according to our first ever study on how the region’s affluent consumers feel about impact investing.
Research published this summer by global investment bank Standard Chartered reveals that “affluent and high-net-worth investors” in Singapore, Hong Kong, China and India plan to increase the proportion of sustainable investments in their portfolios to an average of 19 percent in three years (from 17 percent currently), with Chinese investors leading the way with an expected allocation of 23 percent by 2021.
Yet despite this growing appetite, the findings indicate a significant knowledge gap among the respondents on what sustainable investing is. Despite a staggering 86 percent of them saying they are currently engaged in sustainable investments, only 16 percent can provide even a partially accurate definition, demonstrating that they have a limited understanding of what it entails and the returns and impact it can achieve.
Who Are They?
70 percent of respondents in the banks published research are the so-called ‘value seekers’, essentially investors who do not have a broad knowledge of sustainable the investment approach, whose interest is profit-driven and who expect their sustainable investments returns to be higher than mainstream opportunities.
While millenials are typically associated with leading the charge in the sustainable investing trend in Asia, the bank’s study reveals that mature investors – those aged 34-49 (generation X) – are joining the cause. A group of respondents whom referred to as the ‘altruistic investor’ – primarily made up of generation X – are more willing to accept a financial trade-off between doing good and generating returns.