JPMorgan says Asia's sustainability funds could double


Sustainability funds doubled in 2020 — and are set to double in Asia once more, in line with JPMorgan’s head of environmental, social and governance (ESG) analysis.

“We’ve seen the amount of asset under management dedicated to ESG investing double in the last year,” mentioned Elaine Wu.

“We expect that to double again, in Asia, for the coming year,” she instructed CNBC’s “Capital Connection” on Monday.

Two causes account for the expansion in sustainable funding funds, in line with Wu.

The first is that regulators in Asia are requiring public firms to reveal their ESG knowledge. Second, pension funds and endowment funds are requesting that their asset managers take ESG elements under consideration through the funding course of.

A employee carrying a protecting masks attends to basil crops on the ComCrop rooftop farm in Singapore, on Wednesday, May 27, 2020.

Lauryn Ishak | Bloomberg | Getty Images

Wu mentioned Japan’s Government Pension Investment Fund built-in sustainability and moral practices in 2017, and that despatched a “ripple effect” by means of the business.

“We think that’s going to continue for the rest of the region,” she mentioned.

Sustainability developments

Wu additionally weighed in on key developments in sustainable investments in Asia.

“What you’re going to see is the ‘E’ pillar of ESG … gaining importance,” she mentioned referring to the environmental standards.

Wu identified that South Korea, Japan and China have made commitments to realize internet zero carbon emissions — China has focused to succeed in carbon neutrality by 2060.

“That’s going to create a massive shift in the way China uses energy,” she mentioned. The nation might want to reduce down its reliance on coal from round 60% to round 2% or 3%, she mentioned.

“In its place, we’re going to see renewable power capacity growing by folds,” she mentioned.

“Within renewable power, solar power generation is going to be doubling in the next five years,” she predicted.

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