New Research on Asian Investors Shows High Recognition of Climate Risks and Opportunities

30 November 2023
New data analysing the climate practices of 183 Asia-headquartered investors with $33 trillion under management shows a high recognition of climate risks and opportunities, widespread formal climate disclosures, and long-term target setting.

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Investors with approximately;

  • $27 trillion (81%) of AUM have publicly recognised climate as a source of material risks and opportunities (n=116);
  • $21 trillion (63%) of AUM have set a climate policy (n=90);
  • $23 trillion (69%) of AUM have made climate disclosures aligned with the leading standard, TCFD (n=74); and
  • $13 trillion (38%) of AUM have set a target to reach net zero (n=56)

However, despite Asian investors’ recognition of high climate risks, there appear to be significant barriers to setting short- or medium-term climate targets, or re-aligning capital flows at the rate needed to protect the region from the related economic and physical damages:

  • Investors with $8 trillion (25%) of AUM have set interim targets (n=36),
  • 20 investors, with $5 trillion AUM have set targets to direct capital into renewable energy and other climate solutions,
    (Note, this does not mean that $5 trillion has been earmarked for climate solutions, just that investors who manage that level have funding are intending to direct a proportion towards climate solutions).

Asia Investor Group on Climate Change CEO, Rebecca Mikula Wright said:

“Asia’s major investors have undeniably recognised that climate is going to move markets and reshape the region’s economic outlook, but policy barriers prevent them from actually moving the capital to mitigate climate risks in Asia.

“Under the right local policy conditions, private investors can quickly deploy significant capital that will support governments’ growing responsibilities on climate.

“Commitments to triple renewable energy capacity and phase out fossil fuels, as proposed for COP28, are the kinds of policy signals that will attract Asian investors’ capital.“

“Investors are keen to work alongside policy-makers and business to chart our common path to net zero, protecting local economies, communities and environments.”

About the Research

The 183 institutional investors discussed here were headquartered in the following markets only.

  • Brunei
  • China
  • Hong Kong
  • India
  • Indonesia
  • Japan
  • Malaysia
  • Pakistan
  • Philippines
  • Singapore
  • South Korea
  • Sri Lanka
  • Taiwan
  • Thailand
  • Vietnam

They have a combined global AUM of $33 trillion.

Of the 183 investors, 56 are members of The Asia Investor Group on Climate change.

This analysis is an extract from The Asia Investor Group on Climate Change’s flagship research project “The State of Net Zero Investment in Asia”, which will be released in full in Q1 2024. It will have deeper and more granular analysis of investment practices in the region, including management of physical risk, best practices on corporate and political engagement, fossil fuels, deforestation, and involvement in target-setting initiatives. The research design, data collection and analysis was done independently by AIGCC.

The project is sponsored by MSCI, and AIGCC thanks them for that support.

MSCI is a leading provider of critical decision support tools and services for the global investment community.

With over 50 years of expertise in research, data, and technology, MSCI brings end-to-end solutions that help untangle the complexity of climate finance and investing.

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