• Investment
  • 07 July 2020

Rising generation ventures into sustainable projects

Attitudes to environmental and social roles are changing among owners and investors

    This article is part of the Asia Business Guide Special Guide, produced in partnership with the Financial Times.

    Annie Chen is feeling optimistic. For some time now, Asian investors’ interest in sustainable ventures has “definitely accelerated”, says the Hong Kong-based advocate of environmental, social and governance (ESG) investing. A decade ago, few of the backers that she was trying to persuade were enthusiastic.

    “Even the term ‘ESG’ only became used [here] a few years ago,” she says. “Ten years ago, the banks had no idea what I was talking about.”

    As she has noted, openness in Asia to ESG investing has increased, alongside the growing influence of the new, younger generation. Both trends suggest that sustainable investing is well placed to grow further as opportunities arise to do things differently post-Covid-19.

    This could be “a generation-defining moment”, says Ko Siew Huey, a private investor based in Singapore.

    “Rather than go back to business as usual, with its extractive and growth-at-all-cost approach, can we instead invest our collective resources into strengthening our human, social and natural capital? Maybe it’s time for sustainable investing to be the new normal.”

    Maybe it’s time for sustainable investing to be the new normal

    Ko Siew Huey

    Whether via private investors, family offices, or family-owned and run businesses, attitudes are changing. The purpose of a business is increasingly likely to include commitments to environmental and societal concerns.

    Ms Chen is the youngest daughter of Thomas Chen Tseng-Tao, former chairman of Hong Kong property developer Hang Lung Group.

    She chairs RS Group, a family office focused on sustainability. It recently spun off Sustainable Finance Initiative (SFi), which describes itself as a community of private investors who believe in “capital that matters”, and whose vision is “a world where sustainability is synonymous with finance”. SFi says that interest in its work is fuelled by concerns that Hong Kong is falling behind in wider efforts to achieve social and environmental benefits.

    A business that is focused on ESG is thinking about its impact on society, and how capital should be allocated accordingly, Ms Chen says. “We are now starting to see banks and asset managers starting to push out ESG products. But the entire way we think about the economy needs to change. I would personally like to see more discussion in the public sphere about growth — can we redefine prosperity?”

    In many established family offices, a younger generation trying to shift the investment focus to ESG can struggle to convince their elders to do things differently, without implying that youth knows better, or is smarter. An ESG focus is often presented as a change in circumstances.

    “The previous generation has always done philanthropy — we just want to do it differently, by giving back actively,” says one impact investor, who declines to be named.

    A third-generation wealth owner, Michael Au is among a younger cohort in Hong Kong that believes in an urgent need to address climate change. As managing director of District Capital, the investment arm of the family office established in 2017 with family money from property development, he set out to show it is possible to reconcile ESG values with financial profits.

    “The previous generation was talking about surviving and thriving. My generation is saying we have built our businesses — what can we now do better, in every sense of the word,” he says.

    Earlier this year District Capital invested in C16 Biosciences, a biotech start-up developing a synthetic alternative to palm oil, to address deforestation. It followed a $20m investment by Breakthrough Energy Ventures, a fund set up by Bill Gates to back innovative technologies to address climate change.

    Interested in ventures that combine the innovation of fintech with sustainability, District Capital has just closed an investment into Turnkey Group, an Asia-based ESG data analytics company, in which it is lead investor in the round.

    My generation is saying we have built our businesses — what can we now do better, in every sense of the word

    Michael Au, District Capital

    When Jacky Lam returned to Asia from University of Michigan business school, he started as a trainee in his father’s eyewear business in Hong Kong.

    Today, as managing director of the business, Okia Optical, he says: “It used to be a company that provided products. Now it is a company that provides an idea, not just a product.”

    That idea is sustainable fashion — recycling water bottles to create biodegradable plastic for use in manufacturing Okia’s fashionable eyewear. The initiative turns discarded plastic into a useful and attractive product, while also cutting costs.

    Meanwhile, his father YS Lam and his sister Dorothy have co-founded Dream Impact, a venture to bring together social start-ups, “socially-minded” businesses and investors looking to combine financial returns with social impact.

    Jacky Lam says it took years of research and development work on processing the used plastic to meet the production and design standards required for fashionable creations.

    But he welcomes the chance to respond to a climate- and fashion-conscious younger generation. The initiative is “turning waste into opportunity”.

    This article has been reproduced with permission from FT.com and was originally published on FT.com on 11 May 2020.© 2020 The Financial Times Ltd. All rights reserved. Please do not copy and paste FT articles and redistribute by email or post to the web.


    The contents of this article have not been prepared or reviewed by Bank of Singapore Limited (the “Bank”). The Bank is not responsible for the accuracy or completeness of the information contained in this article which may change without prior notice. This article may contain views which are not representative of the views of the Bank, and such views may have been derived without discussion, consultation or agreement with the Bank. You will need to decide as to whether or not the contents are suitable for you. When you are in doubt, please seek your own independent financial, legal, tax or other advice as you deem fit. Neither the Bank nor any of its officers accept any liability for any loss whatsoever arising out of or in connection with your use of the information in the article.

    Cross-Border Marketing

    Australia: Bank of Singapore Limited (i) is exempt from the requirement to hold an Australian financial services (AFS) licence under the Corporations Act 2001 (Cth) in respect of all financial products or financial services it provides in accordance with ASIC Class Order 03/1102 (as continued in force by ASIC Corporations (Repeal and Transitional) Instrument 2016/396) to any person in Australia who is a wholesale client, and (ii) is regulated by the Monetary Authority of Singapore under Singaporean laws which differ from Australian laws. Brunei: This document has not been delivered to, licensed or permitted by the Autoriti Monetari Brunei Darussalam, the authority as designated under the Brunei Darussalam Securities Markets Order, 2013 and the Banking Order, 2006; nor has it been registered with the Registrar of Companies, Registrar of International Business Companies or the Brunei Darussalam Ministry of Finance. The products mentioned in this document are not registered, licensed or permitted by the Autoriti Monetari Brunei Darussalam or by any other government agency or under any law in Brunei Darussalam. Any offers, acceptances, sales and allotments of the products shall be made outside Brunei Darussalam. Hong Kong SAR: Bank of Singapore Limited is an Authorized Institution as defined in the Banking Ordinance of Hong Kong (Cap 155), regulated by the Hong Kong Monetary Authority in Hong Kong and a Registered Institution as defined in the Securities and Futures Ordinance of Hong Kong (Cap. 571), regulated by the Securities and Futures Commission in Hong Kong. Indonesia: The offering of the investment product in reliance of this document is not registered under the Indonesian Capital Market Law and its implementing regulations, and is not intended to constitute a public offering of securities under the Indonesian Capital Market Law and its implementing regulations. According, this investment product may not be offered or sold, directly or indirectly, within Indonesia or to citizens (wherever they are domiciled or located), entities or residents, in any manner which constitutes a public offering of securities under the Indonesian Capital Market Law and its implementing regulations. Japan: The information contained in this document is for general reference purposes only. It does not have regard to your specific investment objectives, financial situation, risk tolerance and particular needs. Nothing in this document constitutes an offer to buy or sell or an invitation to offer to buy or sell or a recommendation or a solicitation to buy or sell any securities or investment. We do not have any intention of conducting regulated business in Japan. You acknowledge that nothing in this document constitutes investment or financial advice or any advice of any nature. Malaysia: Bank of Singapore Limited does not hold any licence, registration or approval to carry on any regulated business in Malaysia (including but not limited to any businesses regulated under the Capital Markets & Services Act 2007 of Malaysia), nor does it hold itself out as carrying on or purport to carry on any such business in Malaysia. Any services provided by Bank of Singapore Limited to residents of Malaysia are provided solely on an offshore basis from outside Malaysia, either as a result of “reverse enquiry” on the part of the Malaysian residents or where Bank of Singapore Limited has been retained outside Malaysia to provide such services. As an integral part of the provision of such services from outside Malaysia, Bank of Singapore Limited may from time to time make available to such residents documents and information making reference to capital markets products (for example, in connection with the provision of fund management or investment advisory services outside of Malaysia). Nothing in such documents or information is intended to be construed as or constitute the making available of, or an offer or invitation to subscribe for or purchase any such capital markets product. Myanmar: The provision of any products and services by Bank of Singapore Limited shall be solely on an offshore basis. You shall ensure that you have and will continue to be fully compliant with all applicable laws in Myanmar when entering into discussion or contracts with Bank of Singapore Limited. Oman: This document does not constitute a public offer of investment, securities or financial services in the Sultanate of Oman, as contemplated by the Commercial Companies Law of Oman (Royal Decree No. 4/1974), Banking Law of Oman (Royal Decree No. 114/2000) or the Capital Market Law of Oman (Royal Decree No. 80/1998) and the Executive Regulations of the Capital Market Law (Ministerial Decision No. 1/2009) or an offer to sell or the solicitation of any offer to buy non-Omani investment products, securities or financial services and products in the Sultanate of Oman. This document is strictly private and confidential. It is being provided to a limited number of sophisticated investors solely to enable them to decide whether or not to make an offer to invest in financial products mentioned in this document, outside of the Sultanate of Oman, upon the terms and subject to the restrictions set out herein and may not be reproduced or used for any other purpose or provided to any person other than the original recipient. Additionally, this document is not intended to lead to the making of any contract within the territory or under the laws of the Sultanate of Oman. The Capital Market Authority of Oman and the Central Bank of Oman take no responsibility for the accuracy of the statements and information contained in this document or for the performance of the financial products mentioned in this document nor shall they have any liability to any person for damage or loss resulting from reliance on any statement or information contained herein. Russia: The investment products mentioned in this document have not been registered with or approved by the local regulator of any country and are not publicly distributed in Singapore or elsewhere. This document does not constitute or form part of an offer or invitation to the public in any country to subscribe for the products referred to herein. South Korea: The document does not constitute an offer, solicitation or investment advertisement to trade in the investment product referred to in the document.  The Philippines: The information contained in this document is not intended to constitute a public offering of securities under the Securities Regulation Code of the Philippines.  Dubai International Financial Center (DIFC): Bank of Singapore Limited has a branch registered in the Dubai International Financial Centre ("DIFC") which is regulated by the Dubai Financial Services Authority (“DFSA”). Bank of Singapore Limited (DIFC Branch) is not a financial institution licensed in the United Arab Emirates outside of the DIFC and does not undertake banking or financial activities in the United Arab Emirates nor is it licensed to do so outside of the DIFC. This material is provided for information purposes only and it is general information not specific in any way to any particular investor, investor type, strategy, investment need or other financial circumstance. As such this information is not financial advice or a financial promotion, nor is it intended to influence an investor's decision to invest. It is not to be construed as an offer to buy or sell or solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The material is only intended for persons who fulfill the criteria to be classified as “Professional Clients” as defined under the DFSA rules and should not be reviewed, received, provided to or relied upon by any other person. United Arab Emirates (U.A.E): The information contained herein is exclusively addressed to the recipient. The offering of certain products in this document has not been and will not be registered with the Central Bank of United Arab Emirates or Securities & Commodities Authority in the United Arab Emirates. Any products in this document that are being offered or sold do not constitute a public offering or distribution of securities under the applicable laws and regulations of the United Arab Emirates. This document is not intended for circulation or distribution in or into the UAE, other than to persons in the UAE to whom such circulation or distribution is permitted by, or is exempt from the requirements of, the applicable laws and regulations of the United Arab Emirates. The distribution of the information contained herein by the recipient is prohibited. Where applicable, this document relates to securities which are listed outside of the Abu Dhabi Securities Exchange and the Dubai Financial Market.  The Bank of Singapore Limited is not authorized to provide investment research regarding securities listed on the exchanges of the United Arab Emirates which are outside of the DIFC.  United Kingdom: In the United Kingdom, this document is being made available only to the person or the entity to whom it is directed being persons to whom it may lawfully be directed under applicable laws and regulations of the United Kingdom (such persons are hereinafter referred to as ‘relevant persons’). Accordingly, this document is communicated only to relevant persons.  Persons who are not relevant persons must not act on or rely on this document or any of its contents. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. Relevant persons in receipt of this document must not distribute, publish, reproduce, or disclose this document (in whole or in part) to any person who is not a relevant person.  United States of America: This product may not be sold or offered within the United States or to U.S. persons. In Hong Kong, Bank of Singapore Limited is a branch of Bank of Singapore Limited incorporated in Singapore with limited liability.

    © 2019 Bank of Singapore Limited. All rights reserved.

    Version: December 2019