Growing awareness of environmental, social, and governance (ESG) considerations and market reforms as well as government-led initiatives have propelled investors in Asia furthest along the journey to sustainable investing practices, says Mercer’s ‘Asset Allocation Insights 2022’ report. It compares Asia with Latin America, the Middle East, and Africa and found government-led initiatives are strengthening the overall focus on ESG in markets such as Hong Kong SAR and Singapore along with South Korea. The South Korean government, for example, plans to introduce requirements for companies listed on the securities exchange to disclose information about their ESG position, with voluntary reporting until 2025, phasing in mandatory disclosure until 2030 when reporting is required for all listed companies. Investors are also shifting to adapt to ESG risks when considering their investments, with significant growth seen in ESG-oriented products offered, as well as adoption of guidelines and principles by investors across the region. Mainland China, for instance, is encouraging companies to voluntarily report their carbon emissions and fostering the innovation and development of financial products to respond to the need for climate risk mitigation and transition into a low-carbon economy.
- PWC