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More than a quarter of respondents are investing at least half of their portfolios on impact or ESG-based projects, based on a recent survey conducted at the Sustainable Finance Initiative Asian Family Impact Summit 2024
HONG KONG, Sept. 26, 2024 /PRNewswire/ -- The impact investment landscape in Asia Pacific is undergoing a transformation with more family offices increasingly turning to impact investing to generate both financial returns and positive societal impact.
In an inaugural survey conducted at the annual SFi Asian Family Impact Summit, held on 22 May at The Asia Society Hong Kong, Sustainable Finance Initiative (SFi) sought the views of 100 family offices and impact investors. The Summit was co-hosted by SFi and UBS, and amplified by partners BlueOnion, Pictet, Cambridge Associates and InvestHK. Over 120 family offices and sustainable finance leaders convened under the 2024 theme "How Capital Meets Purpose," to inspire bold actions in uncertain times across Investment, Business and Philanthropy.
The survey found that one in four (26%) family offices and impact investors surveyed were investing more than half of their portfolios in impact or ESG-based projects, with a further 23% dedicating somewhere between 10%-50% in their portfolios. More than one third (34%) disclosed that they invested between 1%-10% in impact, whilst 17% of respondents said they do not currently have any sustainable investments in their portfolios.
"The data we've gathered at this year's Asian Family Impact Summit showcases a profound transformation happening within Asia Pacific's Family Offices," said Katy Yung, Chief Executive Officer of SFi. "It is encouraging to see many industry players are motivated by the drive to contribute to sustainable development and solve real issues, and to maximise impact to support entrepreneurs in Asia Pacific."
More than half (56%) responded that they would be focusing on sustainable finance opportunities within Asia Pacific, of which 19% had a broader investment mandate covering the region. Others specifically focused on Southeast Asia (17%) or Greater China (13%). A quarter (25%) of family offices remained focused on global opportunities.
Exciting Themes, Existing Challenges
When asked about the types of investment themes of interest for 2024, respondents honed in on Food & Agriculture, Circularity & Innovative Materials and Healthcare as top picks. Sustainable innovations in these sectors will likely help to address some of the key challenges the region faces as a result of our rapidly changing climate and a growing population, coupled with the existential threat posed to food production, waste crisis and access to healthcare. Nature-Based Solutions & Biodiversity and New Energy & Mobility follow close behind, whilst interest in Gender Lens focused impact investments ranked the lowest.
Despite this, many family offices identified several obstacles they faced when impact investing. Around 22% of the respondents listed high-quality deal flow with suitable exit options as their top challenge, with 16% saying it was hard to find like-minded peers for co-investments. Respondents also noted that conducting due diligence, greenwashing and profitability were all areas their family offices' looked into when considering investments.
"We need to work together amongst the investment community and the projects to address key challenges that are discouraging more deal flow," said Francesco Stadler, Director of Impact Funds & Ventures at SFi. "By directing capital towards projects that tackle issues like food security, circular economy, and healthcare access, impact investors are poised to reap both financial rewards and the satisfaction of contributing to a better future."
Evolving Mindset
Family offices and impact investors have typically been taking an opportunistic approach to sustainable investing. The survey found that 40% remained true to this approach, whilst another 41% adopted a total portfolio approach to sustainable investing. Despite this, when asked what had the most potential to scale impact in Asia, respondents ranked business operations first. This indicates that family offices are realising the importance of sustainability in business operations. Investment portfolios and philanthropy ranked second and third respectively.
The tailwind of Asia Pacific's nascent sustainable investment scene is supported by an increasing interest from family offices and impact investors. As more investors embrace sustainable investing, creating a future where profit and purpose go hand in hand, more structural shifts will address systemic challenges and introduce more impact projects to deliver bold impact in Asia Pacific.
Download the survey findings here.
About Sustainable Finance Initiative
Sustainable Finance Initiative (SFi) is an Asian homegrown community of private investors who believe in Capital that Matters. Our mission is to mobilise private capital for positive impact. As a go-to knowledge and action platform, we empower family offices, private investors and financial services professionals with the knowledge and expertise to invest for purpose and profit.
