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Japan’s Nomura may up Asia share in global sustainability fund with more ESG data

Asian companies lag behind their European and US counterparts on meeting ESG standards
By Goh Thean Eu   
July 28, 2021

Asia’s allocation in the Irish-domiciled Nomura Global Sustainable Equity Fund may be raised once there is more environmental, social and governance data available on Asian companies, according to Leslie Yap, head of investment at the Malaysian unit of Japan’s Nomura Asset Management Co. Ltd.

Launched in April 2019, the fund has recorded annualised gains of 19.22%. It posted a 33.90% gain in the 12 months to June 2021.

Yap says more than 90% of the fund is currently invested in European and US stocks, and only around 2% is invested in Asian stocks.

He says Asian companies lag behind their European and US counterparts on meeting ESG standards.

“European companies have led in ESG practices whilst the Asian companies are playing catch up when it comes to ESG reporting, transparency and best practices. Asian companies are still finding out how best to meet global standards,” he told Asia Asset Management after the virtual launch of the Malaysian-domiciled Nomura Global Sustainable Equity Fund on July 26. The Malaysian fund feeds into the Irish-domiciled fund.

Nevertheless, Yap says the Nomura Group is “constantly on the lookout” for Asian companies that fit the six United Nations Sustainable Development Goals, which include mitigating climate change, eliminating communicable diseases, and providing access to clean drinking water and basic financial services.

The Malaysian-domiciled feeder fund is available to local investors with a minimum investment of 1,000 ringgit (US$236.37).

“We have prioritised affordability as anyone can begin their investing journey with this fund regardless of income level,” Nomura Asset Management Malaysia Managing Director and Country Head Nor Rejina Abdul Rahim told reporters at a virtual press conference.

The company has partnered with Sun Life Malaysia Assurance to offer the fund to the insurer’s clients to make it more accessible to the public.

According to Sun Life Malaysia Chief Executive Officer Raymond Lew, the partnership “deepens Sun Life’s global commitment to continue advancing sustainability by increasing financial security, fostering healthier lives and promoting sustainable investing”.

“By becoming the official insurance partner of this new fund, we will be able to extend more ESG investment choices to our clients,” he told reporters.