The latest Vontobel study entitled "Sustainable Investing in Asia - Uncovering Opportunities and Risks" shows that investors are significantly underestimating the topic of sustainability in Asia as there is a very high return potential for sustainable investments in the Asian region (excl. Japan) and the volume could increase from the current USD 20 billion up to USD 4,000 billion.

Forces of nature increase influence on investment returns

PWM invited seven leading figures in private banking and asset management to discuss the role climate change and sustainable investing considerations are having within the industry. Topics covered included the key drivers for sustainable investing and the prevalence of thematic funds. Elisa Trovato leads the discussion

Elisa Trovato

Today there are also many sustainable products, indices and rankings of organisations by carbon emissions. Is this growing awareness going to have a positive impact on the way asset managers manage their funds or the way investors perceive sustainable products?

Elisa Trovato

In emerging markets, is there enough data available for identifying companies with high standards of sustainability, in order to limit the sustainability risk?

Elisa Trovato

Is that any clear evidence that can explode the myth that responsible investments under-perform?

And how important is the feel-good factor for clients to invest in sustainable investments?

Elisa Trovato

Themes, such as those related to water scarcity or clean energy, are easy to understand and to explain, they often incorporate an ethical or responsible investing component and meet investors’ increasing interest in this area. Are thematic funds still the most powerful means to draw investors’ interest in this area?

Elisa Trovato

Looking at the at the government policies in the clean energy sector, what is the impact of subsidies on market efficiency? For example, in the US there are concerns about long-term legislative support for renewables, which is undermining the growth of the industry, as all the green jobs, and a lot of investments are going to places like China and Germany, where they have long-term programs.

Elisa Trovato

Matt, what do you think are the fundamental drivers of the climate change theme that will be turning up in the year ahead, perhaps from the regulatory point of view? Are there any major initiatives underway?