In a significant shift towards responsible investing, a substantial majority of investors in Singapore have embraced sustainable thematic investments, according to a recent report by Fidelity International published by the Singapore Business Review.
Responsible investing
An impressive six out of ten investors have already incorporated these investments into their portfolios, showcasing a robust commitment to positively impacting the global stage.
This trend underscores a growing desire among Singaporean investors to align their financial goals with environmental, social, and governance (ESG) principles. The same proportion of investors strongly preferred investments that contribute to positive global change, highlighting a conscious effort to integrate sustainability into their investment strategies.
Despite the enthusiasm for sustainable investing, half of the investors are mindful of the potential trade-offs. These include the possibility of lower returns and a reduced selection of investment options. However, the willingness to invest in sustainable thematic investments suggests that many investors are prepared to navigate these challenges to pursue a more responsible investment approach.
Factors influencing investors’ decision
Several factors are influencing investors’ decisions to include sustainable thematic investments in their portfolios:
In an article published by CNA, the launch of a “sustainable living” portfolio by Singapore state investor Temasek has highlighted the importance of sustainable investing and may have influenced retail investors to consider sustainable thematic investments.
With that, a significant proportion of investors in Singapore are incorporating sustainable thematic investments into their portfolios, reflecting a growing commitment to responsible investing and a desire to positively impact the global stage.
Three articles from Standard Chartered, DBS, and LGT explained that since thematic investing focuses on one or more sustainability issues such as climate change, clean water, or education, it appeals to investors looking to address specific environmental or social problems.
In addition, regulators and government agencies in Singapore and Hong Kong have been driving the growth of sustainable investing and ESG adoption within financial institutions and other major industries, which has influenced the adoption of sustainable thematic investments.
As the investment landscape evolves, the surge in sustainable thematic investments in Singapore reflects a broader global trend towards more conscientious and impactful investing practices.