Covid-19 accelerates Middle East interest in sustainable investing
15 October, 2020
Investors in the center East are setting policies on responsible investing and incorporating impact goals because of their portfolios following the onset of the Covid-19 pandemic, according to a fresh study.
Nearly 30 % of respondents in your community said they now believe more strongly in the importance of being sustainable when they invest, according to HSBC's 2020 Sustainable Finance and Investing Survey released on Wednesday.
The survey also discovered that sustainable finance is gaining momentum in the center East, with “values” the key driver among issuers of bonds, loans, and other securities in your community.
“The results of the HSBC Sustainable Finance and Investing Survey reflect what we are seeing on the ground, with Middle East green and sustainable bond issuance up to now this year up almost 50 % on total issuance in 2019,” Gareth Thomas, HSBC’s regional head of global banking for the Mena region, said.
Among issuers in the center East, 93 % of respondents to the survey said environmental and social (E&S) issues are important to them, but only 65 percent of investors said they felt the same manner, compared with the overall global average greater than 90 percent.
However, 41 % of investors said they intend to develop firm policies on responsible investing or on environmental, social, and governance (ESG) issues.
“Among investors who already have these policies set up, very high numbers seek out material ESG issues if they invest and incorporate impact goals,” the survey said.
“Middle Eastern investors are also very optimistic about the great things about ESG - more in this area than elsewhere see the potential for ESG ways of outperform.”
During the past couple of months, the region’s sustainable finance market is becoming more vigorous. In September alone, Saudi Electricity Company raised $1.3 billion in the kingdom’s first public USD-denominated green issuance, while Egypt issued the region’s first sovereign green bond.
In January this year, Abu Dhabi-based clean energy firm Masdar introduced the UAE’s first “green” real estate investment trust with a value as high as Dh1bn, giving investors the possibility to invest in a portfolio of income-yielding properties with a lesser carbon footprint within Masdar City.
The survey discovered that moral values also influence issuers and investors. When asked why they care about E&S issues, 62 % of issuers and 47 % of investors said: “We believe it’s right.”
“The green agenda is here now to stay so that it is imperative that investors and issuers in the center East engage on the topic to better understand how they can capture the economic along with environmental and social benefits of more sustainable business models,” HSBC’s Mr. Thomas said.
Source: www.thenationalnews.com
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