HSBC Asset Management Sustainable Investment Survey
- A lack of suitable sustainable investment products and limited investment choice are major barriers to sustainable investing in Singapore
- Almost half of investors in Singapore believe their portfolio will comprise 100% sustainable investments within the next three to five years
The outbreak of the pandemic has caused people to re-think the way they invest. 68% of investors in Singapore said that the pandemic has raised their awareness of the importance of environmental, social and governance (ESG) considerations, and 62% say that it has prompted them to re-evaluate ways of investing, according to HSBC Asset Management’s new Sustainable Investing survey1 (“the survey”).
The survey, conducted in January and February 2021, was commissioned by HSBC Asset Management to study attitudes towards sustainable investing among mass affluent and high net worth investors, as well as advisers in Hong Kong, Mainland China, Singapore and the UK.
Gap between ESG beliefs and behaviour
In Singapore, 80% of investors believe sustainable, environmental and ethical issues are central to managing their investments. However, there is a significant gap between what investors believe and their actions, as only about a quarter (26%) of their investments explicitly consider ESG factors.
This might be due to a lack of knowledge on ESG investing. 66% of investors in Singapore say they do not want to lose out financially when tackling ESG issues, while 58% say that although they would like to do more, they do not know how to approach this as an investor.
Within the next three to five years, almost half of investors (46%) believe their portfolio will comprise 100% sustainable investments. The key drivers for future take up of ESG investments include products matching risk and return goals, a wider range of ESG investment vehicles and strategies, government incentives and better information on investment performance and ESG issues.
Patrice Conxicoeur, Chief Executive Officer, Southeast Asia, HSBC Asset Management, said “While awareness for ESG issues has increased, there is still a significant gap between investors’ intentions and actions in sustainable investing. However, we believe this can be a signal to future demand. Sustainable investing is a strategy that can provide promising returns and meet investment goals. As asset managers, what we need to do to support this is to provide continued investor education, product development and investment strategies that better embed ESG principles to meet investor goals.”
Barriers to ESG investing
What’s stopping investors? Despite an increase of ESG funds in the market, almost half of investors in Singapore (42%) point to a lack of sustainable investment products that meet their needs and concerns. 38% say that high costs is a hurdle, while 36% do not want to limit the range of sectors or companies they invest in.
In Singapore, financial advisers say that about half of their clients (51%) see ESG investments as important. They point to a shortage in suitable products (60%) as the biggest barrier, followed by a lack of client demand for sustainable investment (57%), indicating the need to raise the understanding of ESG investments among advisers.
When asked what would encourage them to take more interest in sustainable investing in the future, investors in Singapore advocated for a wider range of investment vehicles and strategies using ESG (52%) and more information on what sustainable investment is and how it works (52%).
Mr. Conxicoeur added, “As a leading global asset manager with a long-term commitment to sustainability, we can harness our deep knowledge and investment expertise across the HSBC Group to help clients capture opportunities from the transition to a low-carbon future. Investors are clearly calling for more tailored and targeted ESG products and we will continue to expand our product suite to meet their growing demand. HSBC’s lower carbon fund offerings demonstrate our continued efforts to deliver relevant climate change investment solutions. Our role is to help clients achieve long-term investment objectives while contributing to a more sustainable world for future generations.”
Notes to editors:
1.Sustainable Investing survey by HSBC Asset Management: The survey, conducted in January and February 2021, was commissioned by HSBC Asset Management to study attitudes towards sustainable investing among mass investors and advisers in Hong Kong, Mainland China, Singapore and the UK.
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