An education programme is needed to raise awareness of ESG funds among Hong Kong’s retail investors and to turn a rising interest into actual investment, suggests recently published research.
The survey, commissioned by Pictet Asset Management and School of Business and Management of The Hong Kong University of Science and Technology (HKUST), found that currently just 30% of respondents are aware of the ESG concept and only 5% of them have invested in ESG products.
However of those either invested or planning to invest in ESG funds, over 70% expect to allocate between 10% and 40% of their capital to sustainable products.
The survey, conducted in January, collected 3,770 responses from Hong Kong residents on retail investment themes. The results were published the day before the Hong Kong government opened subscriptions for its first ever green bond available to retail investors.
According to Pictet, the results show that there is strong growth potential for ESG products but also a need to strengthen investor education.
“In order to succeed in their climate policies, governments need private sector investments to be directed towards green projects, and socially responsible projects,” said Christine Loh, chief development strategist, Institute for the Environment at HKUST.
“This survey shows that more investor education is needed to turn ESG awareness into action, and the investment industry plays an important role,” added Loh.
Freeman Tsang, head of intermediaries, Asia ex Japan at Pictet AM, said that gross sales among Hong Kong retail investor for its ESG thematic funds had increased 1.5 times in the last three years, in line with global trends.
“Globally, strong demand is shifting from institutional to private banks and retail investors,” he said.
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