A surge in socially responsible investments to US$ 59 trillion globally over the past decade is nudging Asian firms to change management styles to one that actively addresses corporate governance concerns.
As earnings growth and China’s economy slow, corporate executives are becoming more receptive to the investment messages from funds committed to environmental, social and governance (ESG) principles.
Asian firms now make up more than half of the DJSI Sustainability Emerging Markets Index, a benchmark for ESG performance.
Seven of the 13 additions to the index last year were from Asia.
“A company’s willingness and ability to address ESG issues relevant to its business can be a material driver of the company’s performance and valuation,” said Arthur Lau, head of Asia ex-Japan fixed income at PineBridge Investments, a signatory to the UN Principles for Responsible Investment.