Stepping up on ESG

This time last year when reporting on Asia Asset Management’s annual Fund Manager Survey, we were reflecting on the changes that Covid-19 had wrought on the way we work, live and invest, and how to navigate the ‘new normal’. A year on, remote working, digitalisation and use of technologies such as blockchain and artificial intelligence have not only become commonplace but are now key to how businesses need to operate. Adoption of technologies has accelerated at a pace almost unimaginable pre-pandemic. 

In the words of Catherine Kress, adviser to the chairman of the BlackRock Investment Institute, the crisis “has put history on fast forward”. 

Economically, the pandemic has not only compounded the pressures of global supply chains and rising nationalist sentiments around the world, it has also highlighted inequalities between the rich and the poor, and the emerging and developing markets and their developed counterparts. Add to this the ongoing geopolitical issues and an impending global climate catastrophe, and one might be forgiven for thinking that we are facing a point of no return.

But there is perhaps an argument that the battles against Covid-19 and climate change are ones that we, as humans, are facing as a species. The move towards digitalisation is not limited to the simple logistics of employees working from home and the Zoom culture that has become endemic in our society since the onset of the pandemic. One could also argue the possibility that it has spurred the movement of asset allocations away from industries and commodities that don’t comply with environmental, social and governance principles, such as oil and gas. 

The findings from our 2021 Fund Manager Survey indicate greater commitment to incorporate ESG factors across asset classes. And the managers are also showing willingness and dedication to becoming more efficient and diligent stewards of their clients’ assets.

Whether this is the result of greater awareness of climate change on the part of investors, which in turn may be resulting in greater demand for sustainable investments, matters not. The important thing is that it is happening, and fund managers are finally starting to play more than a minor role.

As we gear up for the United Nations global climate summit in November, we should remember that despite our differences, we’re all in this together. And as we reported last year, the fact that some research suggests that companies with higher ESG scores are proving to be more resilient despite the pandemic is once again encouraging.