The ESG Phenomenon – AXA IM Study Probes Asian Attitudes

Editorial Staff 27 May 2024

The ESG Phenomenon – AXA IM Study Probes Asian Attitudes

The latest reports, developments and commentaries about the ESG trend around the world.

AXA Investment Managers
A survey of 12,000 people around the world found that a higher share of investors in Asia (39 per cent) had funds that can be tagged as ethical or ESG funds, versus 23 per cent of European investors who said they did so.

The report, issued by AXA Investment Managers, questioned people in France, the UK, Belgium, Italy, the Netherlands, Spain, Hong Kong, Japan, Philippines, Singapore, Thailand and Indonesia. The previous survey was conducted in 2021.

Among findings within Asia was a rise in scepticism on how well ESG funds can perform than was the case three years ago. The surge in energy costs in recent years, and concerns about the feasibility of net zero, for example, have taken some shine off the ESG agenda, at least in the short term.

At the top of the ESG/ethical funds rankings for Asia was Indonesia, with 51 per cent of investors holding ESG funds.

Hong Kong has seen an increase in investors with ESG funds (+3 per cent) but it continues to lag behind the rest of region with only 29 per cent of investors holding ESG funds, second-last to Japan (20 per cent).

Overall, investors in Asia generally have stronger expectations surrounding the performance of ESG funds, although this has declined since 2021. Interestingly, investors in Japan and Singapore were among the least likely to expect an ESG fund to outperform the market while those in Indonesia (48 per cent) and Thailand (63 per cent) are most positive on potential ESG fund performance.

Scepticism over the performance of ESG investments is the top barrier to ESG investing – increasing since 2021 (35 per cent in 2023 vs 27 per cent in 2021). Specifically, there is also a lack of clarity over whether ESG funds are genuinely more sustainable. Across demographics, fewer individuals expect an ESG fund to outperform a non-ESG fund of the same risk level in 2023 compared with 2021 (41 per cent in 2023 vs 51 per cent in 2021 across Asia).

Mis-selling concerns have also crept up in Asia (77 per cent taking this view in 2023 vs 71 per cent in 2021).

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