Posted inESG

Singapore investors’ mismatch between ESG values and action

Despite recognising importance of ESG, investors are reluctant to invest sustainably, according to Amundi report.

Over three quarters of Singapore investors can be classed as ‘engaged’ ESG investors, however there is a gap between people’s investment values and where they will actually put their money.  

The group of engaged investors show strong interest and commitment to environmental and social causes on a daily basis, and by extension to their investment decisions, according to the first sustainability profiler investor report by asset manager Amundi and Singapore financial daily The Business Times.

The proportion of engaged investors is significantly higher among younger individuals, with 93% of Gen Z (21 to 24 years old) and 82% of young millennials (25 to 34 years old) identified in the category.

“The generational shift in attitudes toward ESG investing is clear among Singapore investors. In peeling back the layers of this observed high interest, we see that social causes like poverty and inequality are closer to the heart of our younger generation, and they are more likely to be translating this belief into action,” commented Albert Tse, CEO, South Asia at Amundi.

Sentiment vs action

Yet, the survey also found a significant gap between investors’ sentiment and actions when it came to ESG investing.

While 61% of the investors described ESG investing as a priority and more than eight in 10 investors recognised the importance of ESG issues for investment solutions and companies to consider, only a fraction of them were willing to take action.

On average, investors were willing to allocate only one-third of their portfolios into ESG investments, the survey found.

Almost 70% of the respondents said they have a higher interest in sustainable investing when compared with pre-pandemic period, but the study found just four in ten actually increased ESG investment activity.

Moreover, most individual investors in Singapore still see financial investments primarily as a way to grow one’s savings, and only 8% of respondents viewed it as a leverage to drive ongoing environmental and social changes.

“The survey findings indicate a growing understanding and awareness of responsible investing among investors in Singapore, especially among the younger generation,” said Tse.

“However, with results indicating a mismatch between perceived importance of ESG investing to catalyse environmental and social change and of its ability to provide value for investors, more can be done to spark concrete action.”

Part of the Mark Allen Group.