Asset owner platform calls for action to improve ESG in Asia

A co-ordinated investment approach is the most effective way to drive change in Asia, say investors in Europe and Australia.
Asset owner platform calls for action to improve ESG in Asia

Combining efforts will be essential to improving ESG outcomes in Asia, as in other emerging markets, leading asset allocators in Asian and Europe have told AsianInvestor.

“If we, the investment community, can work off the same song sheet then we will make a real difference,” said Hans Op’t Veld, principal director for responsible investments at the €228 billion Dutch pension fund, PGGM.

Op’t Veld is also chair of the markets and members committee of the Sustainable Development Investment Asset Owner Platform (SDI AOP), the world’s largest asset owner-led ESG investment platform, which PGGM founded in 2020, alongside Australian Super, Canada’s British Columbia Investment Management Corporation and Dutch pension fund APG.

He said PGGM was working with the three other founding members to expand SDI investment in Asia, and other emerging markets, where the right investment could provide outsized impacts when compared to developed markets.


“These countries can make step changes, leap-frogging entire intermediary solutions – skipping [mass adoption] of the combustion engine or the landline and moving straight to electric vehicles and mobile,” he said, pointing to infrastructure investing in China as a key example. 

Serlina Chu, director of ESG and stewardship for Australian Super, Australia’s largest superannuation fund with $258 billion in AUM, said that collective action on the AOP provided specific benefits around collaboration, knowledge exchange and consistency of approaches.

“In working with like-minded asset owners … we help to accelerate investments to deliver on the Sustainable Development Goals (SDGs) and thereby support investment outcomes for end beneficiaries,” she said. The AOP measures companies’ ESG performance by their contribution to the UN’s Sustainable Development Goals.

She added that the initiative had a key role to play in improving ESG disclosure in Asia.

“As with developed markets, this initiative can improve emerging company disclosures as it provides a framework of what asset owners and asset managers seek to understand when evaluating products and services-based contributions to the UN SDGs through the lens of the SDI Taxonomy,” she said.


In response to growing demand from its members for exposure to Asia, the platform is about to add a large group of issuers in emerging markets of fixed income securities, which would increase its coverage of Asia considerably.

The platform, which was itself “a type of engagement” was making significant progress in improving ESG standards in Asia by offering a clear pathway to Asian issuers seeking capital raising, he said.

In January, Op’t Veld told AsianInvestor that Asian issuers were leading demand for accreditation by the SDI AOP compared to peers in other regions. “Among the issuers that reach out to us, the majority are Asian,” he said at the time.

Op’t Veld pointed to five new ETFs launched by member asset managers based on the SDI AOP,  revealing the growing adoption of the investor-led initiative to measuring ESG impact. 

However, Op’t Veld noted that currently, most of the SDI AOP’s investor members had developed a separate approach to developed and emerging capital markets when it came to evaluating ESG investments, because of the better quality of data in the former.


In January, James Leaton, head of research at SDI AOP, told AsianInvestor that specific provision had to be made for companies in Asia, where ESG disclosure was less clear, or where information was harder to collect.

The platform has been actively employing artificial intelligence (AI) to collect ESG information, significantly reducing the time it would take to collect manually, but that there were hazards with this approach when it came to companies in Asia.

“For example, you want to ensure the AI doesn’t confuse strong disclosure for strong performance against the [UN’s] sustainable development goals [the AOP’s favoured ESG measure],” Leaton told AsianInvestor at the time.

“If you are looking more at sustainability disclosures, that means ensuring companies that don’t disclose information about activities contributing to SDGs (often the case with smaller companies in Asia, for example) are not penalised for this relative to those that do - a large European company, for example.” 

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