US firms quit climate group, risk Asia backlash – Asia investor ESG fund appetite slows – Manulife, Sun Life to testify on HK pension claims
Welcome to Ignites Asia’s News Brief, a roundup of a few of our top stories from the past week.
U.S. fund firms are likely to face scrutiny from Asian investors over their commitment to ESG investing after exiting the Climate Action 100+ group. J.P. Morgan Asset Management, BlackRock, State Street Global Advisors and Pimco all confirmed last week that they have left or stepped back from the initiative against a backdrop of increasing polarisation of ESG issues in their home market.
European and Asian asset managers unencumbered by such anti-ESG sentiment stand to benefit in their stead, experts say. Read about the potential fallout for U.S. fund firms here.
Flows into ESG funds have diverged from non-ESG funds in some Asia Pacific markets after an uptick in 2020 and 2021, Ignites Asia analysis shows. Taiwan, Australia, and Japan have seen the biggest relative declines in ESG fund flows amid growing regulatory scrutiny around greenwashing risks.
ESG fund flows in India and China remain negligible compared to non-ESG fund flows, though experts are optimistic about growth in appetite among Chinese investors given the country’s ambitious decarbonisation goals. Read more about the region's ESG fund flow trends here.
Manulife and Sun Life have been called to testify in Canada after being accused of withholding pension funds from former Hong Kong citizens. The two firms are among the largest providers of pension funds in Hong Kong’s Mandatory Pension Fund scheme, with Canadian lawmakers arguing total withheld funds amount to more than US$50 million.
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The two companies have previously been called out for blocking Hong Kong pension claims by human rights groups that have linked such actions to dissatisfaction within the Hong Kong government over the number of residents departing the city. Read more about the claims against the two firms here.
After suffering its worst-ever annual outflows in 2022, Hong Kong’s retail fund industry rebounded last year with small net inflows of US$187 million, led by fixed-income funds and money market strategies. Read about the breakdown of the territory’s retail flows in 2023 here.