A Standard Chartered research revealed that there are still ample opportunities for investments in Malaysia and other emerging markets in order to meet the UN’s Sustainable Development Goals (SDGs) by 2030.
The report entitled The US$50 Trillion Question showed that Malaysia is still a popular choice among investors, listing the country as one of their priority markets.
However, results from the report also highlighted that only 22% of assets under management (AUM) are invested into Asia while 64% are invested in Europe and North America.
This contrasts with 88% of investors saying that investments in emerging markets have matched or outperformed developed markets over the past three years.
Apparently, more than two-thirds of investors believe emerging markets are high-risk, compared to 42% who believe the same for developed markets.
Meanwhile, COVID-19 may have made it even harder for emerging markets to get the investment they need. Some 70% of investors believe the pandemic has widened the capital gap further.
The research also pointed a growing focus on sustainability as 81% of investment firms are now taking a disciplined approach to environmental, social and governance investment.
However, all those efforts have not translated into investment in the SDGs as only 13% of the assets managed by the respondents are directed towards SDG-linked investments.
In fact, 55% of the respondents claimed that the SGDs are not relevant to mainstream investment and 47% say investments in SDGs are too difficult to measure.
But when it comes to factors to spur on more SDG investment, respondents pointed to regulatory changes, favourable tax treatment, evidence of higher returns, better data for measuring impact and increased demand from retail investors.
“A lot of progress has been made in recent years to realise the SDGs, but the study makes it clear that we need to move faster,” said Standard Chartered Malaysia managing director and CEO Abrar A Anwar.
“A seismic, unprecedented surge in private sector investment will be requires to bridge the gap and hit the 2030 SDG targets,” he added.
Abrar also noted that since there is no single answer to The US$50 Trillion Question, it is evident that investors need to expand their focus beyond developed markets.
“Malaysia and other emerging economies offer investors a unique opportunity: strong returns combined with the chance to have a significant, positive impact. Now is the time to seize it,” Abrar concluded. – Dec 25, 2020
