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Despite the holiday season, more than 50 people attended the event, hosted by one of our members, International Finance Corporation (IFC). IFC was also the sponsor for the recently released BSR research on ‘Sustainable Investment in China’. The event was co-organised by ASrIA and BSR. Jeremy Prepscius, Managing Director (Asia), BSR, and David St. Maur Sheil, Joint Executive Director, ASrIA, welcomed participants and introduced Matthew Gamser, Principal, IFC. Mr Gamser welcomed everyone and described the role IFC plays in making sustainable investments in Asia. He emphasised that one of IFC's core strengths is its ability to leverage its capital in the region by partnering with other often times larger investors to build a sustainable future with fair returns.
Jeremy and David then explained that the participants would first hear from two BSR speakers about their findings covering global environmental, social and governance (ESG) integration within financial analysis and decision-making as well as Sustainable Investment (SI) in China. Afterwards, investment professionals involved in Asian SRI would have a wide-ranging panel discussion on what SRI looks and feels like on the ground in Asia.
Blythe Chorn, Associate, BSR, offered a valuable overview of global ESG mainstreaming. Blythe emphasised that integration of ESG criteria by mainstream investors is steadily increasing, and described the key integration drivers including:
- Increasing demand from asset owners
- Improving ESG communications from companies
- Growing perceptions of value among asset managers
- Shifting external environments
She also provided a reality check, noting integration is limited to certain areas, equities remain the key asset class for SRI and niche products remain the norm. Interestingly, among her key recommendations was that companies should ensure that both Investor Relations and senior management can speak to the company’s key ESG risks and opportunities.
Complementing Blythe's presentation is ESG in the Mainstream: The Role for Companies and Investors in Environmental, Social, and Governance Integration.
Xin Zhuo, Manager, BSR, then talked about SI in China. She detailed the investment supply chain in China and the early stages of Chinese SI practice, which tends to focus on corporate governance and compliance. She described the obstacles to SI uptake including short-termism, summarising that most market participants have not yet moved from the "what" and "why" to the "how".
Complementing Xin's presentation is the IFC-commissioned report, Sustainable Investment in China 2009.
A panel discussion followed on the opportunities and challenges in SRI in Asia, with Alexandra Tracy, Chairwoman, ASrIA, facilitating. Speakers included: Robert Rubinstein, CEO, TBLI GROUP™; Alice Chow, Managing Director, Squadron Capital; and YK Park, Senior Sustainability Specialist, APG.
The lively discussion added a great deal of colour to SRI practices in Asia. Panellists cited examples of their pre-investment due diligence activities as well as the importance of monitoring fund manager's financial and ESG performance. One speaker commented that the great debate about whether ESG integration is alpha-enhancing is rather wrong-headed, as the sheer size of capital inflows into SRI funds and ESG related products shows the market is voting with their feet. The discussion was followed by an active Q&A after which everyone enjoyed a valuable and relaxed networking session over refreshments provided by IFC.
New ASrIA member, BSR works with its global network of more than 250 member companies to develop sustainable business strategies and solutions through consulting, research, and cross-sector collaboration. With six offices in Asia, Europe, and North America, BSR uses its expertise in the environment, human rights, economic development, and governance and accountability to guide global companies toward creating a just and sustainable world. Visit www.bsr.org for more information.
Sincere thanks to the IFC for their event support, and to Blythe Chorn and Zhuo Xin of BSR for the well received presentations as well as the valuable time of our panel facilitator and other speakers. |
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