Asian institutional investors demonstrate interest in climate-related partnerships

Written by Adam Cadle

07/12/2022

Sixty-two per cent of Asian institutional investors in Asia Pacific ex-Japan have indicated their interest in partnering with each other for knowledge sharing and creating tools and analytics around climate change, latest research published by Cerulli has shown.

Fifty-seven per cent showed an interest in collaborating for climate-related investment opportunities.

Currently, according to the research, investors are pursuing a cautious investing approach due to hesitancy in exploring the new asset class, a lack of understanding about addressing climate risk, uncertainty about the actual use of proceeds raised, and a lack of investible projects. The research showed that 74% of asset owners in the region currently have a maximum of 5% of their assets in green bonds. The percentage is similar for social and sustainability bonds, at 68%. Half have plans to increase their allocation to these bonds over the next two years.

“Investors in the region lack the know-how and technical expertise required in measuring the carbon footprints of their investment portfolios, in subjecting their portfolios to different climate conditions for risk assessment, or in evaluating the scope of emissions to be included in measuring the carbon footprints of their portfolios. Hence, they are keen to not only gain more understanding of these technical areas, but also build their capabilities,” Cerulli associate director Leena Dagade said.

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