Indonesia and Singapore, the Asian countries that lead the fastest growth in sustainable investing

Indonesia and Singapore are the Asian countries that lead the fastest growth in sustainable investing. Asia’s sustainable investment assets – defined as funds employing sustainable investing strategies – stood at US$53 billion at the beginning of 2014, an increase of 32 percent from the US$40 billion at the start of 2012. That’s 0.2 percent of the global total.

These are the findings of The Global Sustainable Investment Review 2014, a report released on 24 Feb by the Global Sustainable Investment Alliance (GSIA), a group of sustainable investment organizations that include the European Sustainable Investment Forum (Eurosif) and Association for Sustainable & Responsible Investment in Asia (ASrIA).

Sustainable investment is an investment approach that considers environmental, social and governance (ESG) factors such as climate change and human rights in portfolio selection and management.

Malaysia, Hong Kong and South Korea are the largest markets by asset size among the 13 countries in Asia where data was collected: Bangladesh, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, Pakistan, Singapore, Taiwan, Thailand and Vietnam.

Singapore and Indonesia are seeing the fastest growth, driven largely by local government policies to encourage sustainable practices. Singapore is positioning itself as a centre for technology and sustainable investment products while Islamic funds are a major contributor to the sector in Indonesia.

“We are encouraged to see a steady growth in sustainable investment assets across the Asia market, however this figure is very small in relative terms when compared with other regional and national markets,” said Jessica Robinson, chief executive officer of AsrIA.

Investors’ growing concerns about sustainability issues, particularly relating to climate change, energy and resource scarcity, are expected to be an important driver for the development of the sustainable investment market in Asia in the coming two to three years, the report said.