With sustainable investing on the rise, experts warn of greenwashing risks – CNA

December 20, 2021 by No Comments

SINGAPORE: Three months ago, Ms Wendy Lim invested S$10,000 into a US-listed exchange-traded fund that focused on companies involved in clean energy and conservation.

The possibility of good returns, coupled with lower risks, was the reason she decided to sink her money into this, said the 34-year-old, who has been investing as part of her retirement planning.

Plus, the energy sector holds growth potential and seems less volatile compared to the disruption-prone technology space, she said.

But Ms Lim also wondered if she could make her money work for a greater good.

“I have always been following climate change (issues). Since I’m intending to invest, I might as well invest in a good cause.

“I do believe that sustainable energy is our future, just like technology. The earth has finite resources and it’s only a matter of time that all countries and industries need to make the change.”

Ms Lim is among a burgeoning group of retail investors looking at growing their cash by investing in companies that focus on environmental, social and governance (ESG) aspects.

The environmental aspect evaluates how a firm uses its resources and limits its impact on the environment. The social front considers labour practices – work conditions, and employment and wage equality – as well as policies towards its suppliers, customers and communities. Governance assesses leadership diversity, business ethics and reputational issues, and even exposure to bribery.

A recent poll by Swiss bank UBS showed that around 90 per cent of respondents in Singapore want to have investments that align with their values, be it for social or sustainable causes. Nearly 70 per cent also said they were more interested in investing sustainably now than before the pandemic.

Another consumer study by local lender UOB found that 90 per cent of Singaporeans were keen to find out more about sustainable investing. Of those surveyed, 13 per cent had already made such investments.

DBS said it has seen a steady increase in investments into its two sustainability-themed funds, with fund purchases as of end-September nearly three times higher compared with January. Investors were mostly between 35 and 55 years old.

Given the strong demand, DBS’ head of financial planning, investment and insurance solutions Evy Wee told CNA that the bank plans to bring in more sustainability-themed investment products for customers next year.

Robo-adviser Syfe, which allows clients to choose from five thematic investment portfolios, said that “ESG and clean energy” has been the most popular option, accounting for 40 per cent of the thematic portfolios created so far.

WHAT’S DRIVING DEMAND?

To be sure, sustainable investing is not entirely …….

Source: https://www.channelnewsasia.com/business/sustainable-investing-returns-environmental-greenwashing-risks-2380276

Tags:

Leave a Comment

Your email address will not be published. Required fields are marked *