ESG issues have become more important for investors in Hong Kong since the coronavirus pandemic, Schroders found in their annual flagship Global Investor Study.
About 60% of the surveyed individuals believe environmental and social issues have gained importance after the pandemic, while only about 10% believe the two topics have become less so.
“It is encouraging to see Hong Kong investors’ growing desire to positively impact society and the environment through sustainable investments,” said Mervyn Tang, head of sustainability strategy, Apac at Schroders.
“We believe that the financial industry holds a significant role to initiate capital reallocation across both listed and private assets, driving progress through sustainable and impact solutions.”
Schroders surveyed 23,000 people from 32 locations globally in March, with 500 of them from Hong Kong. The respondents will be investing at least $11,600 in the next 12 months and have made changes to their investments within the last 10 years.
Among the reasons for investing in sustainable funds, 46% of the respondents said it is because they would make a wider environmental impact, compared with 39% last year. The likelihood for higher returns (33%) and alignment of personal societal principles (32%) were also ranked as the most critical factors.
The survey also found Hong Kong investors are looking for more evidence of better returns and impact from their investments.
More than half of the respondents (51%) believe their appetite for sustainable investment would increase when there are more data or evidence that shows investing sustainably would generate better returns.
41% of investors believe they would be encouraged if there were regular reporting on the ESG impact, while 35% would be motivated by self-certification from the provider that the investment is sustainable.
Another survey done by Capital Group also illustrated the importance of data, with almost half of the surveyed investors identified a lack of data as a top challenge in their investment decision.
Earlier this year, another survey by Schroders showed Hong Kong investors expect their future investment returns to average more than 11% per year, and prefer to invest in Asia.
