Sustainable investing picking up pace in Singapore
Haze-causing forest fires in Indonesia have thrust corporate sustainability practices in the spotlight, and there is now a growing push on companies to be aware of the role they play in preserving the environment.
Investing with an eye on sustainability may still be a relatively new concept in Singapore, but it is one that is beginning to gain momentum.
The Monetary Authority of Singapore (MAS) wants financial institutions in Singapore to take the lead through responsible financing. In a statement on Monday (Oct 5), the central bank said it supports plans to provide guidance for investors – specifically institutional investors – when engaging investee companies, on sustainability, social and environmental issues.
Industry experts said the statement comes at a good time, as interest in sustainable investing mounts.
Said Mr K Sadashiv, partner for Climate Change and Sustainability Services at EY: "You are beginning to see change already and I would say it is a positive signal. From what we see, what MAS and SGX (Singapore Exchange) are doing is to further galvanise that and give a little push, fillip to that whole activity."
Mr Melvyn Yeo, co-founder and partner of Trirec, noted: "The overall landscape is definitely moving toward more sustainable investing, and more focused on CSR (corporate social responsibility) related to the environment.
"Looking at our country in the last couple of years, we are seeing more green buildings, there is a bigger push for Smart Nation and a lot of that is to ensure efficiency and productivity to reduce waste from a variety of factors. There is a lot that has being done and creating the awareness that … gets all of us – whether in the financial world or the layman – to be involved in this space."
Trirec is an investment firm which focuses on renewable energy and cleantech investments, having invested in local solar leasing company Sunseap Leasing earlier this year. It said companies should be given time to change their practices, to take on a more sustainable focus.
Said Mr Yeo: "Whether or not we should discourage people from investing in companies which are deemed to be not sustainable, that might be a bit extreme in my view. Because there are certain companies that exist for a certain reason and as a market practitioner, I do not think we should in any way necessarily over-penalise companies for what they do. We should gently let market forces take its due course."
Singapore is taking steps to beef up guidelines on investing in sustainable development. The Association of Banks in Singapore is expected to release a set of criteria for responsible financing in Singapore soon.