DBS says Tsunami of Money is Flowing to ESG Investments
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Companies that focus on environmental, social, and governance (ESG) tend to be high-performing companies, therefore investing in a basket of ESG stock will you cannot do too badly with a portfolio ESG stock, DBS chief executive Piyush Gupta said.
The truth is that there is a tsunami of money being directed at ESG investments, and therefore, even if the fundamentals don’t bear out, the supply-demand equation will Gupta said at the virtual CNBC Evolve Global Summit on Thursday.
ESG assets are expected to bring in $1 trillion in investments, Gupta noted. If nothing else, that’s going to take prices up, he said, responding to a question of whether ESG is a passing fad or long-term strategy.
DBS recently announced a revised sustainable financing target of S$50 billion ($37.53 billion) by 2024, up from its initial target of S$20 billion.
The bank said there has been renewed focus on sustainability as a result of the Covid-19 pandemic, and as more companies seek to advance their corporate sustainability agenda through sustainable financing,
Questions & Answers
Q.What is driving the expected increase in prices for ESG investments?
What is driving the expected increase in prices for ESG investments?
Piyush Gupta stated that a significant amount of money is being directed towards ESG investments. This supply-demand dynamic is expected to push prices up, even if the underlying fundamentals do not fully support it.
Q.What new target has DBS set for sustainable financing?
What new target has DBS set for sustainable financing?
DBS recently announced a revised sustainable financing target of S$50 billion, which is equivalent to $37.53 billion. This new target is set to be achieved by 2024, an increase from their previous goal of S$20 billion.
Q.What has prompted the renewed focus on sustainability for DBS?
What has prompted the renewed focus on sustainability for DBS?
The bank indicated that the Covid-19 pandemic has led to a renewed focus on sustainability. More companies are now seeking to advance their corporate sustainability agendas, driving demand for sustainable financing options.
Q.How much investment is expected to flow into ESG assets?
How much investment is expected to flow into ESG assets?
DBS chief executive Piyush Gupta noted that ESG assets are anticipated to attract $1 trillion in investments. This substantial inflow of capital is contributing to the 'tsunami of money' he described.
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