A ‘tsunami of money’ is going to sustainable assets

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Sustainable investments can have good returns as a “tsunami of money” is flowing into such assets, said Piyush Gupta, group chief executive of Singapore’s largest bank DBS.

“The truth is that there is a tsunami of money being directed at ESG investments,” he said, referring to investments that take environmental, social and governance factors into account.

Even if the fundamental value of the asset doesn’t go up, the supply-demand equation remains, Gupta told Martin Soong during the virtual CNBC Evolve Global Summit on Wednesday.

Responding to a question on whether sustainable investing is just a trend, or if it’s a long-term strategy, the CEO suggested that, either way, the investment is likely to reap good returns.

If you were to create a basket of ESG stocks, you would typically pick up high-performing companies in any event, and that’s not a bad investment profile to have

Piyush Gupta

DBS Group CEO

“You cannot do too badly being in … a basket of ESG assets, just because there’s going to be a trillion dollars more coming into that asset class,” said Gupta, a member of CNBC’s ESG Council. “If nothing else, that’s going to take prices up.”

Another factor that bodes well for sustainable investing is that companies that focus on ESG “tend to be high-performing companies,” he said.

“Therefore, if you were to create a basket of ESG stocks, you would typically pick up high-performing companies in any event, and that’s not a bad investment profile to have,” he added.

‘Clear’ interest in sustainability

Corporate governance

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