Standard Chartered Malaysia head of wealth and retail banking Harmander Mahal.
PETALING JAYA: Investors in Malaysia rank second highest when it comes to interest in transition investing, according to Standard Chartered Bank.
In a survey, it said 91% of investors in Malaysia indicated very strong interest in transition investing, versus 88% recorded for sustainable investing, Standard Chartered said in its latest Sustainable Banking Report.
The report was based on a survey of 1,600 high-net-worth individuals across eight markets.
Across the markets, the survey results revealed that 83% are interested in sustainable investing, while 87% are keen on transition investing.
“As Malaysia pushes ahead on the path to net-zero by 2050, sustainable finance has emerged as a catalyst for the shift to decarbonisation. Our affluent clients have also shown increasing enthusiasm in the concept of transition investing with climate transition funds growing in prominence,” said Standard Chartered Malaysia head of wealth and retail banking, Harmander Mahal.
He added that this presents an opportunity to convert that interest into action by equipping investors with the knowledge to integrate transition investing into their portfolio, as the economy moves towards the decarbonisation agenda in the long term.
Transition investing involves funding companies in high-emitting sectors, helping them to reduce their emissions and align their business with a net-zero trajectory.
This also reflects the growing prominence of climate transition funds, with assets under management growing steadily over the years, said the report.
While investor appetite is strong, the findings show a gap in understanding, with only 15% of investors able to fully define the concept of transition investing.
The report said despite the interest, investors also face several barriers when it comes to transition investing, with perception of higher risks (50%) – a top consideration among investors.
The others are lack of benchmarking to compare investment products (46%) and the perception that such investments could bring about low returns (44%).
The results for Malaysia painted a slightly different picture, with low returns (59%) and lack of benchmarks (56%) being the top two points of concerns.
