Schroders and Singapore-based UOB have launched a sustainable equity fund – focused on Asia-Pacific companies that meet its which meet their environmental, social and governance (ESG) criteria – despite a downturn in global flows towards climate-friendly investments.
The institutions said the fund would invest in companies that “manage their stakeholders well and possess superior return on investment capital profiles”.
It would also take stakes in companies that create a “positive impact on people and planet” and companies that are “making a positive transition” in their stakeholder relationships.
“With sustainability a key dimension to investing today, it is imperative that we strive to continually develop solutions that not only stay ahead of growing investor demand, but also drive positive impact together with our clients,” Lily Choh, chief executive of Schroders Singapore, said.
In the first quarter of 2022, global sustainable fund inflows fell by almost 36% relative to the fourth quarter of 2021, according to Morningstar research.
Although global sustainable fund assets slipped 4% to $2.77 trillion, the quarterly decline was less pronounced than the 5.5% dip for the broader market.
The Japanese sustainable fund market recorded net inflows of $456 million in the first quarter of 2022, an 87% decline relative to the fourth quarter of 2021. Other Asia-Pacific markets such as India and Thailand experienced net outflows over the quarter.
“Sustainable funds currently face macroeconomic headwinds and while this is a decline in net new investments, continued investor appetite remains as inflows into sustainable funds were more resilient than those into their conventional peers,” said Hortense Bioy, Morningstar’s global director of sustainability research.
- George Russell