Wetlands help fight climate change, so can ESG investing February 3, 2022
Today, climate change is a hot-button topic for the world, and we feel the impact of these issues on our everyday lives through adverse weather events and other changes in the environment. There is realisation of the economy’s dependence on nature’s ecosystem services and natural cycles.
World Wetlands Day, which was on Feb 2, aims to raise global awareness about the vital role of wetlands for people and planet. It holds special significance for the world as we battle to make our planet safe for us and for future generations. This is because wetlands are crucial in helping fight climate change by storing large amounts of carbon dioxide. They are home to a vast array of biodiversity, and also help with water purification and flood control.1
In a report published in the journal Earth-Science Reviews, scientists at University of Adelaide led by Associate Professor Luke Mosley, from the University’s Environment Institute and School of Biological Sciences, say: “Globally, wetlands cover an area greater than 12.1 million square kilometres and deliver at least US$27 trillion in benefits per year, such as for flood mitigation, food production, water quality improvement and carbon storage.”2
Nature-based solutions, like high quality mangroves, are tools considered in ESG investing in achieving positive change needed to address dire environmental challenges we face today.
Today ESG investing is part of a collective approach to known as responsible investment.3
ESG investing is a strategy you can use to put your money to work with companies that earn healthy profits and do so considering the risks and limits of nature and their responsibilities to communities around them.
At Phillip, we invest in companies that are aligned to climate and sustainable development goals, and rely on research and ratings to measure and monitor sustainability outcomes from investments.4
According to Bloomberg, by 2025 a third of assets under management — worth over US$50 trillion — could be ESG investments.
According the Nasdaq.com, the S&P Global Market Intelligence analysed 26 ESG exchange-traded funds and mutual funds with more than $250 million in assets under management. And it found that from March 5, 2020, the month that the World Health Organization officially declared COVID-19 a pandemic, to March 5, 2021, 19 of those funds performed better than the S&P 500.
The outperformers rose between 27.3% and 55% over that period. In comparison, the S&P 500 increased just 27.1%.5
So, now that environmental issues are at the forefront of global consciousness and we have investment choices to invest our money and make a difference through options like ESG investing, let us go ahead and make decisions that will ensure a sustainable future.6
And now for a touch of green fun for our Singapore readers to to mark World Wetlands Day.
Here are some wetlands in Singapore that you can visit, beginning with two of our island nation’s key mangrove areas.
Sungei Buloh Wetland Reserve
Sungei Buloh Wetland Reserve (SBWR) is Singapore’s first and only wetland reserve. It received protective status in 2002 due to its ecological significance, where public activity is limited compared to what is permitted at a nature park. Located in the northwest of Singapore, it is a haven for unique wildlife like sea eagles, smooth otters and saltwater crocodiles-the largest species of reptile in the world.
In order to extend Singapore’s natural capital as part of its City in Nature vision, SBWR was expanded to the Sungei Buloh Nature Park Network. The 400ha protected area includes important refuelling sites for migratory shorebirds along the East-Asian Australasian Flyway (EAAF) like Mandai Mangrove and Mudflat and Kranji Marshes, but also includes other nature parks and eco-corridors. Collaborative science and extensive research determined the ecological connectivity and complementarity between sites and the decision to safeguard these buffer zones and core wetland habitats around SBWR was made.
Fun Fact: Migratory season is from September to March. Crocs are easier to see when they get exposed during low-tide!
Chek Jawa Wetlands, located on the eastern coast of Pulau Ubin has one of Singapore’s richest ecosystems where major habitats, with an abundance of biodiversity, interconnect. A unique sanctuary left in its rustic charm, Pulau Ubin hosts the largest mangrove areas in Singapore and almost all mangrove plant species known to Singapore can be found here. Citizen science works closely with researchers on a project called R.U.M. (Restore Ubin Mangroves Initiative) ecological mangrove restoration is used as a nature-based solution to build resilience for Singapore’s coastlines.7
Fun Fact: Speeding boats travelling along our coastlines erode our beaches daily. Mangrove belts of sufficient width act as barriers that strengthen our coastal zones from bigger climate-related hazards like more intensive storms and sea-level rise.
Keppel Discovery Wetlands
Recreated within Singapore Botanic Gardens is the Keppel Discovery Wetlands. It is a restoration of the forest wetland ecosystem that once existed in the vicinity.
Rasau Walk, Jurong Lake Gardens
Walk along the edge of Jurong Lake at the red-coloured, 300-metre long Rasau Walk boardwalk. The meandering boardwalk at Jurong Lake Gardens passes by partially submerged plants, part of the freshwater swamp ecosystem. South of Rasau Walk are the Neram Streams, naturalised water channels that flow into Jurong Lake.
Tampines Eco Green
Tampines Eco Green’s ecosystems include secondary forests, freshwater wetland, vegetated swales and grasslands. Venture to one of the bird hideouts along the water bodies and see if you are able to spot some of the water fowl along the water’s edge.
Besides the locations above, other wetlands in Singapore can be found at Pasir Ris Park and at offshore islands such as Pulau Ubin and St John’s Island. There is also a Kingfisher Wetlands at Gardens by the Bay, located in the midst of the city.
We hope you enjoyed reading about wetlands (specially those in Singapore and can find the time to visit them), and about ESG investing.
This article was written in consultation with PCM ESG.
-  https://enst.umd.edu/news/how-global-warming-will-affect-our-wetlands
-  https://www.sciencedaily.com/releases/2020/10/201009093544.htm
-  https://www.youtube.com/watch?v=MG48uh7ncrI
-  https://phillipfunds.com/
-  https://www.nasdaq.com/articles/what-is-esg-investing-and-why-is-it-worth-trillions-2021-07-15
-  https://www.poems.com.sg/thematic-portfolios/
-  https://www.littledayout.com/5-wetlands-in-singapore-because-wetland-biodiversity-matters/
About the author
Elston Soares is an editor with the Phillip Securities Research team.