Disclaimer

This is to inform that by clicking on the hyperlink, you will be leaving sc.com/sg and entering a website operated by other parties.

Such links are only provided on our website for the convenience of the Client and Standard Chartered Bank does not control or endorse such websites, and is not responsible for their contents.

The use of such website is also subject to the terms of use and other terms and guidelines, if any, contained within each such website. In the event that any of the terms contained herein conflict with the terms of use or other terms and guidelines contained within any such website, then the terms of use and other terms and guidelines for such website shall prevail.

Thank you for visiting www.sc.com/sg


Proceed to third party website

How would you like to apply?

I am NOT an existing Standard Chartered Current/Checking/Savings Account holder

*SingPass holders with a MyInfo profile can use MyInfo to automatically fill up the form. By clicking “Next”, you will be re-directed to the MyInfo portal, which is not owned or controlled by Standard Chartered Bank (Singapore) Limited or any member of the Standard Chartered Group (the “Bank”). The Bank bears no liability or responsibility over your usage of the MyInfo portal.

*Please note that MyInfo is temporarily unavailable at the stipulated downtimes:

Mon, Tues, Thurs, Fri, Sat:  5:00AM to 5:30AM. Wed: 2:00AM to 6:00AM. Sun: 2:00AM to 8:30AM

I am an existing Standard Chartered Current/Checking/Savings Account holder

How would you like to apply?

I am NOT an existing Standard Chartered Current/Checking/Savings Account holder

*SingPass holders with a MyInfo profile can use MyInfo to automatically fill up the form. By clicking “Next”, you will be re-directed to the MyInfo portal, which is not owned or controlled by Standard Chartered Bank (Singapore) Limited or any member of the Standard Chartered Group (the “Bank”). The Bank bears no liability or responsibility over your usage of the MyInfo portal.

*Please note that MyInfo is temporarily unavailable at the stipulated downtimes:

Mon, Tues, Thurs, Fri, Sat:  5:00AM to 5:30AM. Wed: 2:00AM to 6:00AM. Sun: 2:00AM to 8:30AM

I am an existing Standard Chartered Current/Checking/Savings Account holder

Plant, Person, Human
Plant, Person, Human

Investing with a Purpose

Winnie Lim, Investment Advisor

This article is an educational piece about sustainable investing. For informational purposes only.

The rise of sustainable investing

Interests in sustainable investing have been rising – all in the name of doing good. According to Morningstar¹, 2020 saw a record USD51 billion net inflows into sustainable funds, more than double the total for 2019 and nearly 10 times more than in 2018. Green funds continued blossoming this spring, recording nearly USD21.5 billion in net inflows in the first three months of 2021!² (Refer to Figure 1). And if you are currently invested in mutual funds, you would have received notices from fund houses informing shareholders that they are incorporating environmental, social, and governance (ESG) into their investment processes. So, what exactly is sustainable investing and what does it mean to investors?

Figure 1: Quarterly net flows into sustainable funds

Text, Plot, Number

Source: Morningstar

What is Sustainable Investing?

Sustainable investing can be confusing with technical jargons such as “ESG” and “impact investing”. At Standard Chartered, we simply define this as investing in solutions that not only give financial returns but also generate social and environmental benefits.  It  is essentially investing in companies that have business practices and goals to mitigate the challenges facing our society and planet.

Why Sustainable Investing?

  1. Make an impact 

Beyond improved media coverage and scientific communication, formal accords such as the Paris Agreement on Climate Change have solidified the realisation that the only viable future is a sustainable, low-carbon one and many investors recognize this hard truth.

The impact of the pandemic on the “haves” and “have-nots” has put the spotlight on rising income inequality. Reducing inequality is a vital part of the UN’s Sustainable Development Goals (SDGs), a set of ambitions it seeks to achieve by 2030. Yet, there is still a persistent funding gap of USD2.5 trillion annually that must be bridged to hit those targets. 

The world faces major sustainability challenges such as climate change, ageing population, and inequality, all of which require radical solutions that will bring huge changes to the global financial system, society and the environment. By facing up to these challenges and holding bold visions of the future, you can make a real (and positive) impact on society and environment while still achieving your financial goals with sustainable investing.

  1. Outperforming returns

Many people believe that sustainable investing carries with it an element of sacrifice. In other words, lower returns for the greater good. However, data shows otherwise, and sustainable investing has actually outperformed the wider market.

According to the Morgan Stanley Institute for Sustainable Investing³, in 2020, U.S.-based sustainable equity and bond funds outperformed their traditional peers by a median of 4.3% and 0.9% respectively in terms of total returns.

Sustainable investment strategies performed particularly strongly in 2020 as policymakers focused on “building back better” after the pandemic. The widespread exclusion of fossil-fuel stocks also helped performance in 2020.⁴ However, data shows that this is not just a recent phenomenon. According to Morningstar Research⁵, over the past decade, almost 60 percent of sustainable funds outperformed their ‘conventional’ peers. 

  1. Long-term resilience 

Evidence suggests that sustainable portfolios can be less risky than their conventional counterparts.⁶ This would mean that even if they ultimately deliver the same return, the risk-adjusted return of these portfolios is more attractive.

This was demonstrated last year, as investors digested the impact of the pandemic. Earnings estimates for more sustainable companies fell by a smaller amount than estimates for less sustainable companies.⁷

Sustainable investments have shown great(er) resilience in difficult markets. This should come as no surprise. Simply put, sustainable companies have delivered better performance across areas like culture, supply chain management and customer relations. Furthermore, they are also less likely to be exposed to risks that may be caused by sustainability and governance issues such as scandals. It gives them a greater ability to manoeuvre through uncertain times. Ultimately a key part of managing a company for long-term is sustainable success, ensuring it is robust enough to navigate periods of volatility and change like we have seen in the last year.

This was similarly being demonstrated in previous market sell-offs as seen in Figure 2. The MSCI ESG Universal Index, which includes companies with a strong ESG profile while minimising exclusions from the parent index, has clearly outperformed the MSCI All Countries World Index in past crises.

Figure 2: Companies with higher ESG scores performed better in previous market crises

Text, Word, Number

Source: BlackRock, Aladdin

How can you incorporate sustainable investing into your portfolio?

A sustainable portfolio would be a diversified one, across asset classes that match your risk and return goals. Some investors may allocate a certain portion of their portfolio to sustainable strategies while others build portfolios that are 100% sustainable.

You are not short of options when it comes to sustainable investing. The size of the green asset market continues to grow across all segments. Equities, (green) bonds, mutual funds and even structured products – there is always a solution for anyone who yearns to invest with a purpose.

At Standard Chartered, we have launched ESG Select, a product evaluation framework, which provides curated wealth solutions for clients to express personal views in their investments and capture sustainable development opportunities.

Our ESG Unit Trusts are mutual funds which have been selected based on our proprietary ESG fund selection process. Below is a list of our ESG Unit Trusts:

  

In conclusion, sustainable portfolios may eventually become the norm as evolving regulation, market pressure and consumer preferences force most companies to realign their businesses to thrive in a greener world. But for now, the rising demand for sustainable investments is poised to boost valuations further, which will in turn benefit your overall portfolio performance. It’s not too late; ride this wave and add an element of sustainability to your portfolios today!

To find out more, click here.

Profile

A globetrotter at heart, Winnie did not stop being one even after becoming a mother of 2; in fact, her children are her greatest travel partners! During her free time, besides planning for her next vacation, Winnie also enjoys listening to Maroon 5 and Ed Sheeran going on quiet drives, spending time with her family and friends, and watching football. One of her biggest moments as an Arsenal fan was watching the team play from the stands at the Emirates Stadium.

References

[1] Source: Morningstar – A Broken Record: Flows for U.S. Sustainable Funds Again Reach New Heights

[2] Source: Morningstar – Sustainable Fund Flows Reach New Heights in 2021’s First Quarter

[3] Source: Morgan Stanley – Sustainable Funds Outperform Peers in 2020 During Coronavirus

[4] Source: Schroders Wealth Management – Investing with purpose: what it means for returns

[5] Source: Morningstar – How Does European Sustainable Funds’ Performance Measure Up?

[6] Source: Schroders Wealth Management – Investing with purpose: what it means for returns

[7] Source: Sustainalytics, IBES, BofA

Disclaimers:

This article is for general information only and it does not constitute an offer, recommendation or solicitation of an offer to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments.

This article has not been prepared for any particular person or class of persons and does not constitute and should not be construed as investment advice or an investment recommendation. It has been prepared without regard to the specific investment objectives, financial situation or particular needs of any person or class of persons. You should seek advice from a licensed or an exempt financial adviser on the suitability of a product for you, taking into account these factors before making a commitment to purchase any product or invest in an investment. In the event that you choose not to seek advice from a licensed or an exempt financial adviser, you should carefully consider whether the product or service described herein is suitable for you. You are fully responsible for your investment decision, including whether the investment is suitable for you. The products/services involved are not principal-protected and you may lose all or part of your original investment amount. Standard Chartered Bank (Singapore) Limited will not accept any responsibility or liability of any kind, with respect to the accuracy or completeness of information in this article.

This document is being distributed for general information only and is subject to the relevant disclaimers available at https:// www. sc. com/en/regulatorydisclosures/#market-commentary-disclaimer. It is not and does not constitute research material, independent research, an offer, recommendation or solicitation to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments. This document is for general evaluation only. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person or class of persons and it has not been prepared for any particular person or class of persons. You should not rely on any contents of this document in making any investment decisions. Before making any investment, you should carefully read the relevant offering documents and seek independent legal, tax and regulatory advice. In particular, we recommend you to seek advice regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs, before you make a commitment to purchase the investment product. Opinions, projections and estimates are solely those of SCB at the date of this document and subject to change without notice. Past performance is not indicative of future results and no representation or warranty is made regarding future performance. Any forecast contained herein as to likely future movements in rates or prices or likely future events or occurrences constitutes an opinion only and is not indicative of actual future movements in rates or prices or actual future events or occurrences (as the case may be). This document must not be forwarded or otherwise made available to any other person without the express written consent of the Standard Chartered Group (as defined below). Standard Chartered Bank is incorporated in England with limited liability by Royal Charter 1853 Reference Number ZC18. The Principal Office of the Company is situated in England at 1 Basinghall Avenue, London, EC2V 5DD. Standard Chartered Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Standard Chartered PLC, the ultimate parent company of Standard Chartered Bank, together with its subsidiaries and affiliates (including each branch or representative office), form the Standard Chartered Group. Standard Chartered Private Bank is the private banking division of Standard Chartered. Private banking activities may be carried out internationally by different legal entities and affiliates within the Standard Chartered Group (each an “SC Group Entity”) according to local regulatory requirements. Not all products and services are provided by all branches, subsidiaries and affiliates within the Standard Chartered Group.

Market Abuse Regulation (MAR) Disclaimer Banking activities may be carried out internationally by different branches, subsidiaries and affiliates within the Standard Chartered Group according to local regulatory requirements. Opinions may contain outright “buy”, “sell”, “hold” or other opinions. The time horizon of this opinion is dependent on prevailing market conditions and there is no planned frequency for updates to the opinion. This opinion is not independent of Standard Chartered Group’s trading strategies or positions. Standard Chartered Group and/or its affiliates or its respective officers, directors, employee benefit programmes or employees, including persons involved in the preparation or issuance of this document may at any time, to the extent permitted by applicable law and/or regulation, be long or short any securities or financial instruments referred to in this document or have material interest in any such securities or related investments. Therefore, it is possible, and you should assume, that Standard Chartered Group has a material interest in one or more of the financial instruments mentioned herein. Please refer to https:// www .sc. com/en/banking-services/market-disclaimer.html for more detailed disclosures, including past opinions/ recommendations in the last 12 months and conflict of interests, as well as disclaimers. A covering strategist may have a financial interest in the debt or equity securities of this company/issuer. This document must not be forwarded or otherwise made available to any other person without the express written consent of Standard Chartered Group.

 

Deposit Insurance Scheme

Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured. For clarity, investment products are not deposits and each of the investment products mentioned do not qualify as an insured deposit under the Singapore Deposit Insurance and Policy Owners’ Protection Schemes Act 2012, Rev. Ed. Cap 77B.

This advertisement has not been reviewed by the Monetary Authority of Singapore.