13 Oct 2021
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%)||
|Whatever Works (21%)||
|The Attentives (24%)||
|Confident Enthusiasts (27%)||
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.