26 March 2019, Singapore – Investors in global financial hubs Hong Kong, Singapore, UAE and the UK are increasingly moving towards sustainable investing, with their funds supporting five key United Nations Sustainable Development Goals (SDGs), according to a new survey by Standard Chartered Private Bank1. Affordable and clean energy tops the list of SDGs receiving funds from high-net-worth (HNW) and affluent investors, followed by Clean water and sanitation. Investors also expect improvements to the measurability of impact from sustainable investing. Standard Chartered Private Bank has launched the Impact Philosophy, offering HNW clients a robust roadmap for using their resources to drive impact, measured in line with the global Impact Reporting and Investment Standards (IRIS).
Driving private capital towards the SDGs
The SDGs currently face an annual funding shortfall of USD2.5tn, according to the United Nations Conference on Trade and Development World Investment Report 2014. Yet with growing awareness of these global challenges, more investors are looking to channel their money to effect positive change. The survey revealed the goals that resonate most with the social conscience of investors are mostly around social and environmental impact, with Affordable and clean energy emerging as the top SDG concern, followed closely by Clean water and sanitation.
Figure 1: Top 5 Sustainable Development Goals of interest
|SDG||Affordable & Clean Energy||Clean Water & Sanitation||Good Health & Well-being||Zero Hunger||Climate Action|
|UK: 45%||UAE: 40%||Singapore: 35%||
Figure 2: Top Sustainable Development Goals of interest in each market surveyed
|Top SDG||Affordable & Clean Energy||Affordable & Clean Energy||Good Health & Well-being||Clean Water & Sanitation|
|Singapore: 41%||UAE: 40%||UK: 45%|
*See Annex for top SDG interests by market
The survey also highlighted the increasing ability of private capital to help bridge the SDG funding gap by mobilising the over USD5.4tn in private investible funds across these markets. Approximately 17% of funds from high net worth individuals (HNWIs) surveyed in Hong Kong, Singapore, UAE and the UK are already allocated to sustainable investments, with as much as 22% for HNWIs with assets under management (AUM) above USD10m.
The power of philanthropy
Currently, 16% of AUM from the HNWIs surveyed is allocated towards philanthropy. While they are looking at increasing their allocations to philanthropy, 84% of these HNW investors are open to shifting their funds from philanthropy to sustainable investing. This points to a potentially significant source of future funds flow to be unlocked, provided investors can be assured that the organisations they support are dedicated to making a social impact and able to show results.
Investors want robust measurement of their impact and highlighted some preferred metrics to track their contribution to the SDGs:
- Affordable and clean energy: Reduction in energy consumption through conservation and efficiency initiatives (44%) ranked the top metric, followed by an increase in the number of households provided access to energy by the organisations they support/invest in (32%)
- Clean water and sanitation: Increase in access to basic services such as water, education and healthcare (52%), increase in volume of waste water treated (32%) and the organisation they support/invest in employing management practices for water quality protection (16%)
- Good health and well-being: Increase in access to basic services such as water, healthcare and housing (54%), followed by an increase in the number of certified and trained caregivers employed (27%)
Looking ahead, investors highlighted the following additional SDGs which could interest them over the next three years:
|SDG||Zero Hunger||Affordable & Clean Energy||No Poverty|
|Overall future interest||27%||24%||18%|
|Markets that ranked this SDG top 3||Singapore, UAE, UK||Singapore, Hong Kong||Singapore, Hong Kong|
Didier von Daeniken, Global Head, Private Banking and Wealth Management at Standard Chartered, said: “The financial system has the potential to be a major catalyst in the sustainability revolution. With the risks from major challenges, such as climate change and lack of access to healthcare, becoming ever clearer, our clients are looking to play a more active role as responsible global citizens. Our new Impact Philosophy offers a structured roadmap to help them mobilise their capital towards achieving the Sustainable Development Goals.”
Standard Chartered’s Impact Philosophy
In response to client feedback and growing interest in the measurement of impact outcomes, Standard Chartered Private Bank has launched an Impact Philosophy framework along with a sustainable and impact investing offering to clients.
While there is a growing interest in sustainable investing, many HNWIs are held back by the lack of information on avenues that match their interest and the relatively few established ways to measure the impact of their investments. Bolstered by the Bank’s open architecture approach, clients can access unbiased information and the most relevant solutions to translate their passion into action.
The Impact Philosophy has a strong focus on measurement: it is underpinned by the Theory of Change, which in the context of sustainable investing, aims to map out what a particular investment does and how it leads back to a desired outcome, providing clients a robust roadmap for success and measurement based on the global IRIS. Clients receive an Impact Profile report outlining a range of solutions –from traditional investing portfolios and philanthropic opportunities, to sustainable and impact investing opportunities.
For more information on our Impact Philosophy, please visit our Sustainable Investing page.
1The survey, conducted by Agility, covered 421 affluent and high-net-worth individuals in Hong Kong, Singapore, UAE and the UK, with a minimum of USD1m in investments, who are currently engaged in sustainable investing.
For further information please contact:
Private Banking and Wealth Management Communications
Standard Chartered Bank
+65 6596 9284
Note to Editors
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Top 5 Sustainable Development Goals currently supported across the markets