It guides private equity investors on how to align their strategy, management, transparency and governance practices, to achieve their decarbonisation goals.
SINGAPORE, April 17, 2024 /PRNewswire/ — Fullerton Fund Management (Fullerton) has partnered with the United Nations Development Programme (UNDP) to develop a Sustainability Management Framework to guide private equity climate investing in Asia, using UNDP’s SDG Impact Standards as a foundation. The framework offers private equity companies a roadmap to adopting practices that can help to accelerate their net zero goals.
In Asia, the environmental and commercial case for climate investments is compelling, with the addressable market size for green businesses in Asia targeted to reach over US$4 trillion by 2030[1]. Governments have made strong commitments to decarbonise their economies, and around $53.5 trillion of investments between 2020-2060 is required to meet the net-zero targets already announced[2]. There are significant investment opportunities ahead and private equity can play a pivotal role alongside public spending in bridging the funding gap.
Private equity investors are well-positioned to exert greater influence on portfolio companies over climate and sustainability issues. However, disclosure standards in the region are uneven and corporate disclosures remain lacking, particularly in emerging Asia. This poses challenges for climate investors who are looking to assess the material environmental issues, and their implications, for their investments.
The Sustainability Management Framework guides private equity investors on how to integrate sustainability considerations and the sustainable development goals (SDGs) into their strategy, management, transparency and governance practices, to achieve their decarbonisation goals. Through the framework, climate investors can conduct a critical evaluation of the various possible investment practices and decide on the unique set of practices which aligns best to their investment mandates and stakeholders’ requirements.
"As an investor of private capital in Asia, we recognise that sustainability issues have considerable implications for a company’s investment value, particularly for private equity, which has a long investment horizon. With the launch of this Sustainability Management Framework with support from the UNDP, we are committed to integrating sustainability considerations in our private equity climate investments. More importantly, we hope to share this framework and insights from real-world case studies with our peers, to enable them to evaluate the relevant sustainability aspects required to optimise decarbonisation in the region," said Huck Khim Tan, Deputy Chief Investment Officer and Head of Alternatives at Fullerton Fund Management.
"The private sector has a significant role to play in accelerating Asia’s decarbonisation, including in collaboration with and alongside efforts from actors in the public and multilateral domains. Recognising this, we are delighted to collaborate with Fullerton Fund Management to develop this Sustainability Management Framework, leveraging the UNDP’s SDG Impact Standards for private equity funds. This framework is useful for climate investors who are looking to align their internal practices and decision-making to achieve their decarbonisation goals," said Haoliang Xu, UN Under Secretary General and Associate Administrator of the United Nations Development Programme.
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About Fullerton Fund Management
Fullerton Fund Management Company Ltd ("Fullerton") is an active investment specialist, focused on optimising investment outcomes and enhancing investor experience.
We help clients, including government entities, sovereign wealth funds, pension plans, insurance companies, private wealth and retail, from the region and beyond, to achieve their investment objectives through our suite of solutions. Our expertise encompasses equities, fixed income, multi-asset, alternatives and treasury management, across public and private markets.
As an active manager, we place strong emphasis on performance, risk management and investment insights. Incorporated in 2003, Fullerton is headquartered in Singapore, and has associated offices in Shanghai, Jakarta and Brunei. Fullerton is part of a multi-asset management group, Seviora, a holding company established by Temasek. Income Insurance, one of Singapore’s leading insurers, is a minority shareholder of Fullerton.
For more information, please visit www.fullertonfund.com
About United Nations Development Programme ("UNDP"):
As the United Nations lead agency on international development, UNDP works in 170 countries and territories to eradicate poverty and reduce inequality. UNDP helps countries to develop policies, leadership skills, partnering abilities, institutional capabilities, and to build resilience to achieve the Sustainable Development Goals. UNDP’s work is concentrated in three focus areas; sustainable development, democratic governance and peace building, and climate and disaster resilience. Learn more at undp.org or follow @UNDP
About UNDP Sustainable Finance Hub:
The UNDP Sustainable Finance Hub (SFH) brings together UNDP’s financial expertise to harness public and private capital for the Sustainable Development Goals (SDGs)- supporting governments, investors and businesses in reaching climate, social impact and sustainability targets. Its work drives systemic change towards a sustainable financial architecture that benefits people and the planet. SDG Impact is a global flagship initiative of SFH, established to accelerate private sector investment and activity towards sustainability and achievement of the SDGs by making it easier for businesses and investors to embed impact into their internal management and decision-making practices, as well as direct capital to where it can make the most difference to people and planet.
Find out more about its integrated services that ensure all finance is sustainable, at sdgfinance.undp.org or follow @UNDP_SDGFinance
[1] McKinsey & Company, 2022. Green Growth: Capturing Asia’s $5 Trillion Green Business Opportunity. Available at: www.mckinsey.com/featured-insights/future-of-asia/green-growth-capturing-asias-5-trillion-green-business-opportunity.
[2] Asia Society Policy Institute, 2022. Building a Powerful and Coherent Vision for Net Zero in Asia. Available at: https://asiasociety.org/policy-institute/building-powerful-and-coherent-vision-net-zero-asia
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