Looking around the world of investment, it is clear that sustainable investing is on the rise. According to the Global Sustainable Investment Alliance 2019, over US$31 trillion of assets globally are being managed in environmental, social and governance (ESG) investments, up 34% from 2016.
Standard Chartered's Private Bank Sustainable Investing Review 2020 also highlights the rising tide of sustainable investments, which is being further accelerated by COVID-19. Indeed, the pandemic has led to investors prioritising companies that are resilient enough to weather short-term shocks, with 42% of surveyed investors saying that they would invest 5-15% in ESG investments over the next three years. A recent survey by Cerulli Associates released in April 2020 supports these trends, with 76% of European banks apparently bracing for a surge in demand for ESG funds.
The family office space is not immune to this siren call of sustainable investing. According to the 2020 UBS Global Family Office Report, family offices are expected to more than double their allocation, from 9% to over 19%, in ESG-integrated investments over the next five years.
Pairing this with the looming intergenerational wealth transfer, which will see a more socially and environmentally conscientious generation take the reins of family fortunes, I believe we are now at a tipping point.
Looking specifically at Asia, my latest article published by Wealth & Society examines the key drivers behind the rise of sustainable investing among family offices and how this changing landscape is triggering a shift in the investment focus of families and family offices across the region. Click below to read the article in full: