- Global temperatures are rising and are on track to reach 3°C by the end of the century3
- 3x increase in electricity demand4
- 2.2 billion of the world’s population lack access to safe drinking water5
Information source:
Understand Sustainable Investing Choices
What is sustainable investing?
- Sustainable investing focuses on investing in environmentally efficient projects, with the premise that it promotes long-term environmental development. Such investment projects do not only aim to bring positive impacts to the environment, but also to help promoting technological innovation, driving the development of green industry, while creating business opportunities for financial industry.
- As for corporates, sustainable investing implies that their business objectives no longer only focus on profitability. In addition to fighting for the biggest interests for shareholders, they also have to consider the needs of different stakeholders, such as employees, consumers, suppliers and communities, etc.
- As for investors, relevant trends can be reflected from the consideration process of selecting investment products. In the past, investors may only focus on returns. Now, they also hope to exclude stocks with negative impacts, such as tobacco, ammunition and gambling, etc. Furthermore, they also incorporate positive screening into the process of sustainable investing, such as considering environmental, social and governance factors, so as to bring positive benefits to the environment and society.
What are the driving factors of sustainable investing?
Climate Change
The current scenario:
The extreme weather caused by climate change does not only result in huge safety and economic cost, it also destroys the access to food and water.
Key Opportunities:
- Electricity infrastructure: electricity networks
- Water infrastructure: water networks & water treatments
- Renewables infrastructure: wind, hydropower & solar
Demographic shifts
The current scenario:
Key Opportunities:
- The world’s population is rapidly growing, forecasted to reach 9.7 billion by 20506
- Yet 1.6 billion people in the world lack adequate housing7
- Less than half of the world’s population have access to basic health services8
- Healthcare infrastructure: healthcare facilities & elderly care homes
- Social housing & educational infrastructure: affordable housing & student accommodation
Rapid Urbanisation
The current scenario:
With the rising trend of urbanisation, infrastructure that supports the city operation now tends to connect different city systems together, moving forward to a more efficient and sustainable way.
Key Opportunities:
- Affluence and increased demand for global services and products contribute to increasing environmental pressures
- Increasing urbanisation will put more pressure on services in cities, including transport and communication
- Digital infrastructure: data storage & telecommunications tower operations
- Transport infrastructure: sustainable railway network
- Sustainable logistics: sustainable warehousing & sustainable transportation systems
Why consider sustainable investing?
The capital investment in energy transition has been increasing, presenting vast investment opportunities.
Capital flowing into sustainable funds has been increasing, driving the development of the overall market.
Investments involve risks. The above information is provided for information only based on market conditions as of date of publication, not to be construed as investment recommendation or advice. Forecasts, projections and other forward looking statements are based upon current beliefs and expectations, may or may not come to pass. They are for illustrative purposes only and serve as an indication of what may occur. Given the inherent uncertainties and risks associated with forecast, projections or other forward statements, actual events, results or performance may differ materially from those reflected or contemplated.
- Source: World Economic Forum, December 2020.
- Source: BP Energy Outlook 2018, December 2018.
- Source: UNICEF, December 2019.
- Source: UNICEF, June 2019.
- Source: Habitat, September 2017.
- Source: Statista, November 2021.
- Source: J.P. Morgan Asset Management, April 2022.
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- Past performance is not indicative of future performance.
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- RMB Conversion Limitation Risk (Only applicable to Individual Customers)- RMB is currently not fully freely convertible. Individual customers can be offered CNH rate to conduct conversion of RMB through bank accounts and may occasionally not be able to do so fully or immediately, for which it is subject to the RMB position of the banks and their commercial decisions at that moment. Customers should consider and understand the possible impact on their liquidity of RMB funds in advance.
- RMB Conversion Limitation Risk (Only applicable to Corporate Customers)- RMB is currently not fully freely convertible. Corporate customers that intend to conduct conversion of RMB through banks may occasionally not be able to do so fully or immediately, for which it is subject to the RMB position of the banks and their commercial decisions at that moment. Customers should consider and understand the possible impact on their liquidity of RMB funds in advance.
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