Singapore asset manager Fullerton Fund Management and the United Nations Development Programme (UNDP) have teamed up to launch a sustainability management framework to guide climate investing in Asia for private equity.
It uses the UNDP’s Sustainable Development Goals Impact Standards as a foundation.
“The framework offers private equity companies a roadmap to adopting practices that can help to accelerate their net zero goals,” Fullerton says in a statement on April 17.
According to the company, private equity investors are well-positioned to exert greater influence on portfolio companies over climate and sustainability issues.
“However, disclosure standards in the region are uneven and corporate disclosures remain lacking, particularly in emerging Asia. This poses challenges for climate investors who are looking to assess the material environmental issues, and their implications, for their investments,” the asset management firm says.
Tan Huck Khim, Fullerton’s deputy chief investment officer and head of alternatives, says the firm hopes to share this framework with its peers.
According to Tan, sustainability issues have “considerable implications” for the investment value of a company, particularly for private equity which have long investment horizons.
“We hope to share this framework and insights from real-world case studies with our peers, to enable them to evaluate the relevant sustainability aspects required to optimise decarbonisation in the region,” he says.
Fullerton had US$40 billion of assets under management as of end-2023.