Investors pushing the drive to net zero

Fifty six percent of investors are planning to increase their investment to help the world to achieve net zero over the next twelve months

13 Oct 2021

Fifty six percent of investors are planning to increase their investment to help the world to achieve net zero over the next twelve months

In Asia, over 50% of Hong Kong and Singapore investors are happy to invest in companies driving net zero with competitive returns (Global: 45%).

13 October 2021, Hong Kong/ Singapore - Ninety One has today published the Planetary Pulse survey, Investing for a Carbon Free World: What Investors Want. The survey of more than 6000 individual investors (“investors”) across ten markets (UK, Germany, Italy, Denmark, Sweden, South Africa, Singapore, Hong Kong, US, and Canada) found that investors are ready to support the drive to net zero, with half stating that asset managers should use their influence as shareholders of carbon-heavy companies to help facilitate the reduction in carbon emissions. This suggests that investors are ready to use their wealth to invest in sustainable solutions which assist in the drive to reach net zero.

Based on their answers, respondents fell into four broad investor personalities when they thought about investing overall and sustainable investing specifically.

Quietly Cautious (28%)
  • Highly risk adverse
  • Less interested in interrogating ethics and practices of companies
  • Not convinced net-zero will affect climate change
  • Limited to no knowledge of net zero
Whatever Works (21%)
  • Carefree attitude, tend to go with the flow
  • Interested in following investment trends
  • Becoming more aware of net zero
The Attentives (24%)
  • Carefully planned, well researched, pay close attention to where their money ends up
  • Willing to pay more for things that are ethical and environmentally beneficial to do their part
  • Truly believe in net zero- building for a financial and planetary legacy
Confident Enthusiasts (27%)
  • Focused on building income and wealth
  • Hungry for research, data, and ideas
  • Net zero enthusiasts but without proper action by big polluting economies and sectors they will simply divest

Compared to global responses (74%), more investors from Hong Kong (78%) and Singapore (81%) believe they know about net zero, and how the principle of net zero is in relation to investing (Global: 62%, Hong Kong: 70% , Singapore : 66%). They also believe that reducing carbon emission should be encouraged and happy for their money to focus on achieving net zero (Global: 77%, Hong Kong: 78%, Singapore: 76%).

By allowing investors to briefly reflect on the potential outcomes of engagement and divestment, it was found that their preferences shifted away from divesting by 6-percentage points, with a 5-percentage point swing towards proactively engaging with companies to reduce carbon emissions. This indicates that spending time clarifying investing for impact is vital. All the cohorts of the investors identified shifted their views on how to approach net-zero investing when given the chance to discuss the issue at stake.

It is evident that divesting from high emitters will create significant risks and inescapable consequences for emerging markets, starving them of capital. While nearly half (49%) of investors were able to see the negative impact divestment will have on the developing world, there is more conversation needed to raise awareness regarding allocation of capital to ensure an inclusive, global transition to net-zero.

Hendrik du Toit, Founder and CEO, Ninety One: “We believe in sustainability with substance. However, there is an incontrovertible and sobering fact about the drive to net zero -any effort that does not work for the world’s 7.9 billion people, will fail everywhere. To really save the planet, we must help emerging markets go green. That means robust carbon markets, debt-for-climate deals, and financing options to speed the transition. As a company with its roots firmly in South Africa, we understand this need perhaps better than most. Emerging economies, after all, are not responsible for the bulk of emissions to date.”

What about investors in Asia?
Encouragingly, these findings confirm the growing global movement to create long-term, impactful changes to tackle climate change, and shift to investing for net zero, with 47% of investors (Hong Kong: 59%; Singapore: 55%) have around less than or equal to 25% exposure of investment in net zero funds or companies, 56% of them are planning to increase the portion of money going to funds or companies that are helping to achieve net zero (Hong Kong: 58%; Singapore: 56%).

35% of investors, including those from Hong Kong, ranked fully ESG integrated investment process as the most important while choosing an investment manager for sustainable investing, Singapore investors view reputation for being trustworthy as the most important.

Deirdre Cooper, Co-Head of Thematic Equity, Ninety One: “The climate crisis presents both tremendous opportunities and risks to investors. This survey makes clear that investors across the globe are looking to allocate capital to funds which invest in companies and countries that are working towards a sustainable future. The investment management industry has an integral role to play in tackling the climate crisis in the real economy, and this cannot be met by providing investment capabilities to investors which tilt towards asset-light sectors, moving capital out of emerging regions, or selling assets to less responsible owners and outsourcing. It is our responsibility to provide end investors with solutions which can counter the climate crisis.”

Methodology of the survey

The survey was commissioned by Ninety One to conduct an online survey of around 6,000 individual investors across ten markets : UK, Germany, Italy, Demark, Sweden, South Africa, Singapore, Hong Kong, US and Canada. A total of 900 respondents are investors from Hong Kong and Singapore. The survey was conducted from July to September 2021 by Intrinsic Insight.

Important Information

The information may discuss general market activity or industry trends and is not intended to be relied upon as a forecast, research or investment advice. The economic and market views presented herein reflect Ninety One’s judgment as at the date shown and are subject to change without notice. There is no guarantee that views and opinions expressed will be correct and may not reflect those of Ninety One as a whole, different views may be expressed based on different investment objectives. Although we believe any information obtained from external sources to be reliable, we have not independently verified it, and we cannot guarantee its accuracy or completeness. Ninety One’s internal data may not be audited. Ninety One does not provide legal or tax advice. Prospective investors should consult their tax advisors before making tax-related investment decisions.

This communication is provided for general information only and is not an invitation to make an investment nor does it constitute an offer for sale. Investment involves risks. This is not a recommendation to buy, sell or hold a particular security. No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided. The securities or investment products mentioned in this document may not have been registered in any jurisdiction.

This communication may include hyperlinks which lead to websites published or operated by third parties. Providing the hyperlink does not imply any affiliation, sponsorship, endorsement, approval, verification or monitoring of any information contained in the third party websites. Ninety One has not reviewed any third party websites for accuracy or completeness and is not in any way responsible for the content of any third party websites. Using or following the hyperlinks is at your own risk.

In Hong Kong, this communication is issued by Ninety One Hong Kong Limited and has not been reviewed by the Securities and Futures Commission (SFC).

Except as otherwise authorised, this information may not be shown, copied, transmitted, or otherwise given to any third party without Ninety One’s prior written consent. © 2021 Ninety One. All rights reserved.

Past performance figures shown are not indicative of future performance. Investors are reminded that investment involves risk. Investors should refer to the offering documents for details, including risk factors. This website has not been reviewed by the SFC. 

By clicking on the hyperlink of Investor relations below, you are leaving this website with information specific for retail investors in Hong Kong and entering the global website.

Please note that the global website is not intended to target Hong Kong investors. It has not been reviewed by the Hong Kong Securities and Futures Commission (“SFC”). The website may contain information on funds and other investments products that are not authorised by the SFC and therefore are not available to retail investors in Hong Kong. The website may also contain information on investment services / strategies that are purported to be carried out by a Ninety One group company outside of Hong Kong.

Any product documents and information contained in this website are for reference only and for those persons or entities in any jurisdictions or country where the information and use thereof is not contrary to local law or regulation.

Issuer: Ninety One Hong Kong Limited
Email: [email protected] 
Telephone: (852) 2861 6888 
Fax: (852) 2861 6861