Just nine per cent of more than 5,000 investment strategies in the Asia-Pacific region meet the highest standards of environmental, social and governance investing, says Mercer.
Since 2008 Mercer has assigned a 4 point scale to investment strategies based on how ESG guidelines. Funds are assessed on how integrated such principals are in active fund management.
Asked if she was surprised at the small number of funds that meet the highest ESG criteria in Asia-Pacific, Mercer’s head of responsible investing for the region Helga Birden simply says “no.”
“This is a process that takes time,” she says.
ESG “is not going away as issued of climate change, water and air quality will become more critical to investing,” says Birden.
More than half of the funds that meet the highest standard of investing along ESG lines in Asia-Pacific have a thematic ESG focus, says Nathan Fabian, chief executive of the Investor Group on Climate Change Australia/New Zealand.
“A lot of managers have signed up to the principals but have struggled to implement them,” says Fabian.