Environmental, Social and Governance (ESG)

What is Environmental, Social and Governance (ESG) Investing?

ESG investing is the inclusion of environmental, social and governance issues as part of financial analysis and an important part of the investment process. It allows investors to manage material risks and drive positive impact while facilitating investment opportunities, ensuring longer-term viability for investments.

Background of ESG

In January 2004, 55 of the world's leading financial institutions endorsed the UN Global Compact report "Who Cares Wins". The report required the participating companies to conduct financial evaluations with the consideration of ESG factors as these issues impact a company's investment value.

The financial institutions believed that addressing these issues would bring benefits in the long-run. Today, emphasis on ESG is growing increasingly as more investors expect companies to commit strongly to ESG criteria.

How good ESG management impacts a company?

The way a company manages ESG issues gives insight into its quality and ability to compete successfully. Companies that perform better in addressing these issues can:

  • increase shareholder value
  • anticipate regulatory action
  • anticipate stakeholder management
  • contribute to sustainable development

Why ESG Matters to Investors?

It is possible to achieve a triple bottom line of (i) Good Investment Returns (Prosperity); (ii) Good Social Impact (People); and (iii) Positive Environmental Impact (Planet) — all with ESG Investing.

The "3Ps" of Triple Bottom Line

Prosperity

People

Planet

How can ESG Investment be beneficial?

Good Risk Management

ESG investing has gone mainstream and stakeholders have become increasingly aware that ESG decisions can enhance the value of a company in the long term. Companies that perform well on non-financial ESG factors are better positioned.

Positive Impact to The World

Environmental threats have had harsh ecological, social and economic impacts. Investing in ESG funds means supporting countries and companies that make positive changes that benefit people, the economy and the financial markets. It also means investing in a world that is free of the consequences of climate change and biodiversity loss.

Future-proofing

Sustainable investing is not just a trending fad, but a need for our funds to flow where the world's pressing issues can be addressed. Investors should be aware of threats that may affect their financial future, then align investments to where it contributes most to a sustainable future.

Rewarding Investors' Values

ESG investing allows investors to contribute meaningfully to global climate, biodiversity and sustainable development goals. Investment commitments in these spaces cater to what investors value most, be it environmental, social or corporate governance, that helps to accelerate action towards meeting our global goals.

Enquiry

Have an enquiry? Get in touch with us at (+65) 6531 1555 or message us below!

    What is Environmental, Social and Governance (ESG) Investing?

    ESG investing is the inclusion of environmental, social and governance issues as part of financial analysis and an important part of the investment process. It allows investors to manage material risks and drive positive impact while facilitating investment opportunities, ensuring longer-term viability for investments.

    Background of ESG

    In January 2004, 55 of the world's leading financial institutions endorsed the UN Global Compact report "Who Cares Wins". The report required the participating companies to conduct financial evaluations with the consideration of ESG factors as these issues impact a company's investment value.

    The financial institutions believed that addressing these issues would bring benefits in the long-run. Today, emphasis on ESG is growing increasingly as more investors expect companies to commit strongly to ESG criteria.

    How good ESG management impacts a company?

    The way a company manages ESG issues gives insight into its quality and ability to compete successfully. Companies that perform better in addressing these issues can:

    • increase shareholder value
    • anticipate regulatory action
    • anticipate stakeholder management
    • contribute to sustainable development

    Why ESG Matters to Investors?

    It is possible to achieve a triple bottom line of (i) Good Investment Returns (Prosperity); (ii) Good Social Impact (People); and (iii) Positive Environmental Impact (Planet) — all with ESG Investing.

    The "3Ps" of Triple Bottom Line

    Prosperity

    People

    Planet

    How can ESG Investment be beneficial?

    Good Risk Management

    ESG investing has gone mainstream and stakeholders have become increasingly aware that ESG decisions can enhance the value of a company in the long term. Companies that perform well on non-financial ESG factors are better positioned.

    Positive Impact to The World

    Environmental threats have had harsh ecological, social and economic impacts. Investing in ESG funds means supporting countries and companies that make positive changes that benefit people, the economy and the financial markets. It also means investing in a world that is free of the consequences of climate change and biodiversity loss.

    Future-proofing

    Sustainable investing is not just a trending fad, but a need for our funds to flow where the world's pressing issues can be addressed. Investors should be aware of threats that may affect their financial future, then align investments to where it contributes most to a sustainable future.

    Rewarding Investors' Values

    ESG investing allows investors to contribute meaningfully to global climate, biodiversity and sustainable development goals. Investment commitments in these spaces cater to what investors value most, be it environmental, social or corporate governance, that helps to accelerate action towards meeting our global goals.

    Enquiry

    Have an enquiry? Get in touch with us at (+65) 6531 1555 or message us below!

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      Get personalised advice and learn about various options from a dedicated Financial consultated supported by a team of specialist:

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      ESG Investment through Investment Tools

      Exchanged Traded Fund (ETF)

      ETFs are open-ended investment funds traded on a stock exchange. ESG ETFs aim to track or correspond to the performance of an underlying index or asset based on the different ESG lens. With hundreds of ESG ETFs and counting on POEMS, you have a wide range of ETF solutions ready to be deployed for your green portfolio

      Explore the riches of the ETF world and advance filters powered by Morning Star

      Unit Trust (UT)

      As the first Unit Trust platform to advocate ESG investing, we strongly believe that you can "Do Well by Doing Good" (Benjamin Franklin's quote) by including a sustainable investment objective into your portfolio. We offer our clients a vast selection of more than 40 ESG unit trust funds that may suit their investment needs.

      To simplify your search for ESG funds, select "ESG" under the Sector/Strategy filter in our Fund Finder

      Refer to our White Papers and Start Investing!

      Seminars

      Hang on tight, more exciting events are coming up!

      Meanwhile, Click to view seminars/webinars for Platform, Bond, CFD, ETF, Forex/Futures, Insurance, Unit Trust and more.

      LATEST ESG CONFERENCE

      Resources

      White Papers

      Taking Stock: What drives ESG

      While ESG started small and was initially led by consumer demand from a small sector of the market, it has seen substantial growth since the late 1980s and is becoming the main long-term path that companies deem to follow. Contrary to popular belief, ESG investing is not commercial suicide, rather an outperformance proven by historical events. The way a company manages ESG issues reveals its quality and ability to compete successfully.

      Read Full Paper here.

      Securing our Future: Global sustainable Leadership, Local ESG Stewardship

      ESG integration at the corporate and organisational levels involve the systemic and explicit inclusion of sustainability factors into organisational structure and the business’ decision-making processes.

      At PhillipCapital, we incorporate ESG considerations across decision levels while doing our fiduciary duty to assure regulatory compliance, and to ensure long term commitments. We aim to influence change through our investments by supporting countries and companies that are aligned with sustainable development goals, while rewarding those in transition to a low-carbon and circular economy and ones that have also chosen socially-just and nature-positive pathways. In our race to net zero, we prefer to partner and not to punish.

      Read Full Paper here.

      Driving ESG investing through people and process

      Why does it matter?

      Low-lying coastal and island states are now having to foot the bill for widespread shrinking of the cryosphere. Costs continue to accrue in adaptation measures, loss and damages due to sea level rise alone. Cryospheric and hydrological changes negatively impact our food security, water resources, health and importantly tourism and recreation.

      The rate of ocean warming has doubled since 1993. It has its own string of effects. Marine species have undergone shifts in geographical range and composition. Bali, a tropical island, recorded its first Great White Shark, a temperate species, in October 2019.

      Besides receiving unexpected visitors on your Saturday swim, the cause for concern in going from 1.5°C warming to 2°C could mean 1.7 billion more people experience severe heatwaves at least once every five years, and that would include us in sunny Singapore.

      Read Full Paper here

      ESG Frequently Asked Questions

      Learning about ESG

      Sources: CFA Institute, ESG Issues in Investing (2015)

      There are a number of ESG standards and principles today.

      Numerous institutions, such as the UN Principles of Responsible Investing (PRI), Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), and the Task Force of Climate-Related Financial Disclosures (TCFD) are working to form standards and definite materiality to facilitate incorporation of these factors into the investment process.

      The evidence is that the long-term performance of ethical funds versus their conventional counterparts is neither better nor worse. There are good and bad ethical funds, just as there are good and bad conventional funds. However, ethical funds tend to focus on certain sections of the market and as a result do not track headline benchmarks such as the FTSE 100 Index. This means that ethical funds can go through periods of both under and out performance relative to these indices, but over the long-term there are reasons why these thematically driven funds could actually perform better, since they are designed to benefit from the opportunities created by climate change, resource pressures and demographic change.

      Most ESG investments are designed to focus on solutions to social and environmental challenges. Clean technologies, renewable energy, healthcare, clean water, and waste management all require large amounts of capital, and through our portfolios we are helping to bring about the transition to a more sustainable future.

      POEMS provides a wide range of ESG investment products.

      For Funds and Exchange Traded Funds, you may use instrument screeners to filter ESG. For Funds, Visit https://unittrust.poems.com.sg/all-about-funds/fund-finder/ > Advance Criteria > Sector/Strategy > ESG.

      For ETFs, Visit https://www.poems.com.sg/etf-screener/ > Fund name > Type ESG

      You can visit https://www.poems.com.sg/ESG/seminar/ page for the latest ESG seminars

      The costs for trading publicly listed ESG ETFs is similar to trading stocks, where the cost incurred will differ according to your account type. More information can be found here: https://www.poems.com.sg/pricing/

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      IMPORTANT INFORMATION

      This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

      An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

      Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

      Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

      The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

      The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

      The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

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

       

      Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
      250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
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