Investing for a Better World: Navigating 6 Paradoxes

Chow Jau Loong, Sunil Puri
Stewardship Asia Centre

21 November 2023

Sustainable investing, a niche concept a decade ago, has made strong, steady progress into the mainstream of investing. This demand is led by a diverse group of stakeholders, including millennial investors, asset owners and governments seeking to effective positive social and environmental change, alongside financial returns. However, amidst this positive momentum, the rise in anti-ESG sentiments, evolving regulations and geopolitical conflicts add a layer of complexity for investors in their pursuit for long-term value creation. Investors need to tread carefully to ensure that sustainable investments continue to be aligned with both ethical and financial objectives.

Drawing insights from senior leaders across Asia-Pacific and Europe within the investor community, this report highlights six paradoxes of sustainable investing:  

  1. Value and Values Philisophy: How to deliver value, without compromising values?
  2. Exclusion and Inclusion Approach: How to balance “doing more good” with “doing less harm” in responsible investing?
  3. Duty of Prudence and Loyalty: How to fulfil the twin duty of prudence and loyalty as a fiduciary while investing in ESG?
  4. Long-term and Short-term Time Horizon: How to evaluate ESG factors to balance immediate financial returns with long-term value creation?
  5. Solo and Collaborative Engagement: How to balance one-on-one engagement with collective-influence approach? 
  6. Resourcing for Influence and Scalability: How to optimise resources to engage meaningfully with a larger pool of investee companies? 

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