Half of Singaporean investors think ESG will compromise returns

But the opposite is true: investments with strong ESG ratings perform better, says SJP Asia.

Half of Singaporean investors believe that they will compromise their investment returns should they consider ESG factors in their investments, a latest survey revealed, underlining the continued lack of understanding about sustainable investment.

In a survey of 1,045 Singaporean investors by St. James’s Place Wealth Management Asia (SJP Asia), 53% of Singaporeans believe that they would need to compromise on investment returns in order to invest responsibly.

However, the opposite is true, as market data instead showed a strong correlation between investments with strong ESG ratings and better performance. The investments with stronger ESG credentials are also more likely to have better long-term growth prospects, since they are by nature much more sustainable, according to SJP Asia.

Overall, 57% of local investors said that they would consider environment, social, and governance (ESG) factors in their investments—with 40% indicating that their interest is increasing.

When it comes to ESG issues, investors in Singapore indicated that environmental responsibility (43%) is the top concern, followed by social issues (32%) and governance (25%).

Investing green for retirement
One of the best ways to lower their carbon footprint whilst ensuring great returns is to move pension investments towards sustainable funds, SJP Asia said.

Projections show that this can help reduce an individual’s carbon footprint by over 2,200 tonnes of CO2 emissions over their working life. This 27 times less than if a single individual limited showers to two minutes each time, take one less international flight per year, take the train instead of driving, and eat only one piece of meat each week, combined.

Not only does it help the environment, it’s also more sustainable in the long term in lieu of humans’ longer lifespans.

In 2020, we have 573,423 centenarians, which is almost 17 times more than 70 years ago, and projections suggest 3.7 million of us in the world will become centenarians in 2050, SJP noted.
In contrast, people only lived to the age of 45 on average 70 years ago.

“With people living longer today, there is also a greater emphasis on responsible investing to drive changes for good, than simply to just generate profits,” SJP Asia concluded in their press release.

Photo courtesy of Singkham (Pexels)