Canceled - Environmental, Social and Governance Update: Recalibrating the Key Missions and Redefining Investor Demand

Environmental, Social and Governance Update: Recalibrating the Key Missions and Redefining Investor Demand

Thursday 25th April - 3.00pm - 4.00pm HKT / SGT

Join us on April 25 for a detailed look at the evolution of ESG-centric investing for private clients and how the Asian market has viewed Environmental, Social and Governance objectives during the more difficult global market conditions since early 2022. Are clients now less focused on ESG metrics and objectives when returns are more difficult to mine out? Has ESG been somewhat distorted by too many companies jumping on the bandwagon at the expense of common-sense business practices, such as focusing excessively on diversity and inclusion, or totally opposing fossil fuels that mankind will clearly need for many years to come until green alternatives can deliver sustainably? Or is this a phase of ESG coming down to earth, with its key objectives still valuable in helping investors focus on medium to longer-term objectives and identifying key positive qualities of the companies or sectors that they invest in?

According to a Financial Times article in early January, the second half of 2023 saw far fewer ESG funds launched, apparently as investors baulked at increased scrutiny of (potentially unrealistic) sustainability claims made by companies and asset managers. Whereas Morningstar Direct reported approaching 100 new ESG funds annually between 2020 and 2022, there were a mere handful of new ESG launches in H2 of 2023.

This shift away from ESG is partly, as the FT reports, citing Morningstar data, weaker performance of ESG funds compared with the overall market in 2022 and 2023, whereas they had outperformed in 2019, 2020 and 2021. Additionally, there appears to be a certain backlash amongst politicians and investors against companies becoming excessively focused on social commitments such as diversity, equity and inclusion, potentially at the expense of returns and delivering customers the products and services they need in the real world. Hence, many leading brand-name financial institutions have also been removing the ESG badges from certain funds and projects. There has also been a refocusing on key objectives such as business sustainability and resilience.

But many argue that this is simply a natural realignment and readjustment to earlier excesses, as the world ran headlong into ESG and liquidity flooding into ESG funds helped them outperform the general market in the ‘good times’ before markets fell and rates surged from late 2021 onwards. Indeed, this is perhaps a very positive period for ESG as regulation, data and metrics catch up with the reality of actual needs to ensure a smooth path ahead for ESG-driven investing.

The experts will therefore look at the state of the ESG market in Asia, where there was a more muted embrace of ESG than in markets such as Europe and the US. Are Asian private clients also disenchanted with ESG, or do they see this phase as an opportunity to focus on the true quality end of the ESG funds market, helping them avoid those funds and companies that are claiming ESG principles more for social media clamour than commercial and business objectives?

After all, the basic objectives of ESG are laudable, or at least they were before being pushed to the limit by companies jumping on the social media bandwagon by claiming to be pioneers or leaders in diversity and inclusion.

The ‘E’ criteria aim to help investors define how a company performs from an environmental impact perspective. The ‘S’ for Social criteria define how a company manages relationships with employees, suppliers, customers, and the communities in which it operates. And the ‘G’ for Governance deals with a company’s corporate culture, its leadership, executive and broader compensation, audits, internal controls, and shareholder rights.

So, join us on April 25 when our panel will look beneath the headlines to drill down into the core missions around ESG and the real state of the market.

Plus, by attending this session, you will also be entitled to receive a 1 Hour CPD/CPT Certificate.

Questions

• Why has the sheen come off ESG funds worldwide? What does this mean for the rollout of ESG-centric investing in Asia?
• Does the panel think this is a new and positive phase for ESG as asset managers, companies, and investors now focus more on the genuine objectives rather than the hype and social media aspects?
• Where does the Asian private client investor stand on ESG at the moment?
• What about the next and younger generations of clients in Asia?
• What about the wealth and advisory community? How are they adjusting their approach to ESG?
• Why did ESG-driven investing, in particular, evolve so rapidly worldwide during the bull markets to late 2021, and what has happened since?
• What has been happening in terms of regulation, and also in terms of data and greater consensus on definitions and ESG metrics?
• Is the wealth management industry in Asia sufficiently informed and appropriately committed to these issues to properly make a difference with their clients?
• What is the Asian WM community doing to adapt their products, services, and expertise to the evolution of the ESG investment market today and in the future?
• How can wealth managers better promote sustainability and ESG in the face of the pullback in the major global markets?
• How do investors stay vigilant about greenwashing?