Shaping the future of responsible investment – Hong Kong
Posted 16th June 2016
The Hong Kong edition of the PRI’s Global Workshop Series had a different tenor to many of the other meetings, in that it marked the first gathering of the PRI’s ex-Japan Asia network since the integration into the PRI of ASrIA.
The Association for Sustainable & Responsible Investment joined forces with PRI last October, in a move that cemented considerable previous cooperation between the two groups, and which, I believe, will make for more effective promotion of sustainable finance and investment in the region.
It was great to see so many participants, with more than 50 attendees joining us at the offices of PwC. While I introduced the Blueprint consultation process, the proceedings focused more broadly on the trends and prospects for responsible investment in the region, and on some of the detailed work the PRI is doing to help signatories integrate ESG analysis.
While there are important developments in terms of responsible investment practices, Asia’s investors are somewhat behind their counterparts in Japan, Europe, Australasia and the Americas. That is despite the very real ESG risks the region faces – especially risks related to climate change – and policy, regulatory and technological developments that present substantial investment opportunities, particularly emanating from China.
The Chinese government and central bank, People’s Bank of China, have been enthusiastically promoting the green finance agenda, both as a domestic strategy but also as part of its G20 presidency, as the country pursues aggressive policies to decarbonise its economy and promote renewable energy.
In common with its peers elsewhere, market regulators and policy-makers are turning their attention to the systemic risks to the financial sector posed by climate change. This is a central concern of the PRI’s current consultation on a sustainable financial system, and was discussed as part of the workshop panel session.
The consultation is also considering whether the PRI should adopt the UN Sustainable Development Goals (SDGs) as a framework to encourage and measure the ‘real world’ impact of signatories’ responsible investment activity.
One of our panellists, Rob Barker of BNP Paribas, observed that any serious effort to meet the SDGs will require collaboration across the financial services sector and beyond – and should reflect commercial considerations as core to the investment opportunity.
Many of our existing and potential signatories in the region are at an early stage in their responsible investment journey; for them, practical advice, such as that provided by the PRI’s upcoming ‘how to’ publication on ESG integrated analysis, will prove invaluable, as will the case studies provided by existing signatories including Robeco and MSCI. It is exactly this sort of capacity building and information sharing that, I believe, will help us grow our signatory base as the region increasingly embraces responsible investment as the ‘new normal’.